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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 1934For the fiscal year ended December 31,2020 ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For th
2、e transition period fromCommission file number:0-50231 Federal National Mortgage Association(Exact name of registrant as specified in its charter)Fannie MaeFederally chartered corporation52-08831071100 15th Street,NW800 232-6643Washington,DC20005(State or other jurisdiction ofincorporation or organi
3、zation)(I.R.S.EmployerIdentification No.)(Address of principal executive offices,including zip code)(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredNoneN/AN/ASecur
4、ities registered pursuant to Section 12(g)of the Act:Common Stock,without par value 8.25%Non-Cumulative Preferred Stock,Series T,stated value$25 per share Fixed-to-Floating Rate Non-Cumulative Preferred Stock,Series S,stated value$25 per share 7.625%Non-Cumulative Preferred Stock,Series R,stated val
5、ue$25 per share6.75%Non-Cumulative Preferred Stock,Series Q,stated value$25 per share Variable Rate Non-Cumulative Preferred Stock,Series P,stated value$25 per share Variable Rate Non-Cumulative Preferred Stock,Series O,stated value$50 per share 5.375%Non-Cumulative Convertible Series 2004-1 Preferr
6、ed Stock,stated value$100,000 per share 5.50%Non-Cumulative Preferred Stock,Series N,stated value$50 per share4.75%Non-Cumulative Preferred Stock,Series M,stated value$50 per share 5.125%Non-Cumulative Preferred Stock,Series L,stated value$50 per share 5.375%Non-Cumulative Preferred Stock,Series I,s
7、tated value$50 per share 5.81%Non-Cumulative Preferred Stock,Series H,stated value$50 per share Variable Rate Non-Cumulative Preferred Stock,Series G,stated value$50 per share Variable Rate Non-Cumulative Preferred Stock,Series F,stated value$50 per share 5.10%Non-Cumulative Preferred Stock,Series E
8、,stated value$50 per share5.25%Non-Cumulative Preferred Stock,Series D,stated value$50 per share Indicate 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 pursu
9、ant to Section 13 or 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all 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
10、reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check 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
11、12 months(or for such shorter period that the registrant was required to submit such files).Yes No 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“
12、large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark
13、 if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.o Indicate by check mark whether the registrant has filed a report on and attestation to its managements
14、 assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a shell company(as define
15、d in Rule 12b-2 of the Exchange Act).Yes No The aggregate market value of the common stock 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 30,2020(the last business day o
16、f the registrants most recently completed second fiscal quarter)was approximately$2.5 billion.As of February 1,2021,there were 1,158,087,567 shares of common stock of the registrant outstanding.Table of ContentsPagePART IItem 1.Business.1Introduction.1Executive Summary.2Summary of Our Financial Perf
17、ormance.2COVID-19 Impact.3Our Mission and Charter.5Mortgage Securitizations.6Managing Mortgage Credit Risk.9Conservatorship,Treasury Agreements and Housing Finance Reform.12Legislation and Regulation.19Human Capital.29Where You Can Find Additional Information.30Forward-Looking Statements.30Item 1A.R
18、isk Factors.34Item 1B.Unresolved Staff Comments.57Item 2.Properties.57Item 3.Legal Proceedings.57Item 4.Mine Safety Disclosures.59PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.60Item 6.Selected Financial Data.61Item 7.Managem
19、ents Discussion and Analysis of Financial Condition and Results of Operations.63Key Market Economic Indicators.63Consolidated Results of Operations.67Consolidated Balance Sheet Analysis.79Retained Mortgage Portfolio.80Guaranty Book of Business.83Business Segments.84Single-Family Business.85Single-Fa
20、mily Mortgage Market.87Single-Family Market Activity.88Single-Family Business Metrics.90Single-Family Business Financial Results.91Single-Family Mortgage Credit Risk Management.94Multifamily Business.122Multifamily Mortgage Market.124Multifamily Market Activity.125Multifamily Business Metrics.125Mul
21、tifamily Business Financial Results.128Multifamily Mortgage Credit Risk Management.129Liquidity and Capital Management.136Fannie Mae 2020 Form 10-KiOff-Balance Sheet Arrangements.145Risk Management.147Mortgage Credit Risk Management.149Institutional Counterparty Credit Risk Management.151Market Risk
22、 Management,including Interest-Rate Risk Management.159Liquidity and Funding Risk Management.164Operational Risk Management.164Critical Accounting Policies and Estimates.165Impact of Future Adoption of New Accounting Guidance.166Glossary of Terms Used in This Report.166Item 7A.Quantitative and Quali
23、tative Disclosures about Market Risk.169Item 8.Financial Statements and Supplementary Data.169Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.169Item 9A.Controls and Procedures.169Item 9B.Other Information.174PART IIIItem 10.Directors,Executive Officers an
24、d Corporate Governance.174Directors.174Corporate Governance.178ESG Matters.185Report of the Audit Committee of the Board of Directors.188Executive Officers.190Item 11.Executive Compensation.192Compensation Discussion and Analysis.192Compensation Committee Report.210Compensation Risk Assessment.210Co
25、mpensation Tables and Other Information.211Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.219Item 13.Certain Relationships and Related Transactions,and Director Independence.220Policies and Procedures Relating to Transactions with Related Perso
26、ns.220Transactions with Related Persons.222Director Independence.223Item 14.Principal Accounting Fees and Services.225PART IVItem 15.Exhibits,Financial Statement Schedules.226Item 16.Form 10-K Summary.228INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.F-1Fannie Mae 2020 Form 10-KiiPART IWe have been unde
27、r conservatorship,with the Federal Housing Finance Agency(“FHFA”)acting as conservator,since September 6,2008.As conservator,FHFA succeeded to all rights,titles,powers and privileges of the company,and of any shareholder,officer or director of the company with respect to the company and its assets.T
28、he conservator has since provided for the exercise of certain authorities by our Board of Directors.Our directors do not have any fiduciary duties to any person or entity except to the conservator and,accordingly,are not obligated to consider the interests of the company,the holders of our equity or
29、 debt securities,or the holders of Fannie Mae MBS unless specifically directed to do so by the conservator.We do not know when or how the conservatorship will terminate,what further changes to our business will be made during or following conservatorship,what form we will have and what ownership int
30、erest,if any,our current common and preferred stockholders will hold in us after the conservatorship is terminated or whether we will continue to exist following conservatorship.FHFA established 2020 performance objectives for us that included preparing for our eventual exit from conservatorship.Con
31、gress and the Administration continue to consider options for reform of the housing finance system,including Fannie Mae.We are not permitted to pay dividends or other distributions to stockholders other than the U.S.Department of the Treasury(“Treasury”)and,if we attain and maintain sufficient capit
32、al to meet the capital requirements and buffers recently established by FHFA for two consecutive quarters,we will not be able to retain any additional capital reserves.Our agreements with Treasury include a commitment from Treasury to provide us with funds to maintain a positive net worth under spec
33、ified conditions;however,the U.S.government does not guarantee our securities or other obligations.Our agreements with Treasury also include covenants that significantly restrict our business activities.For additional information on the conservatorship,the uncertainty of our future,our agreements wi
34、th Treasury,and recent developments relating to housing finance reform,see“Conservatorship,Treasury Agreements and Housing Finance Reform,”“Legislation and Regulation”and“Risk Factors.”Forward-looking statements in this report are based on managements current expectations and are subject to signific
35、ant uncertainties and changes in circumstances,as we describe in“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 i
36、n this report.You can find a“Glossary of Terms Used in This Report”in“Managements Discussion and Analysis of Financial Condition and Results of Operations(MD&A).”Item 1.Business IntroductionFannie Mae is a leading source of financing for mortgages in the United States,with$4.0 trillion in assets as
37、of December 31,2020.Organized as a government-sponsored entity,Fannie Mae is a shareholder-owned corporation.Our charter is an act of Congress,and we have a mission under that charter to provide liquidity and stability to the residential mortgage market and to promote access to mortgage credit.We we
38、re initially established in 1938.Our revenues are primarily driven by guaranty fees we receive for assuming the credit risk on loans underlying the mortgage-backed securities we issue.We do not originate loans or lend money directly to borrowers.Rather,we primarily work with lenders who originate lo
39、ans to borrowers.We securitize those loans into Fannie Mae mortgage-backed securities that we guarantee(which we refer to as Fannie Mae MBS or our MBS).Effectively managing credit risk is key to our business.In exchange for assuming credit risk on the loans we acquire,we receive guaranty fees.These
40、fees take into account the credit risk characteristics of the loans we acquire and consist of two primary components:Loan-level pricing adjustments,which are upfront fees received when we acquire single-family loans.Base guaranty fees,which we receive monthly over the life of the loan.Guaranty fees
41、are set at the time we acquire loans and do not change over the life of the loan.How long a loan remains in our guaranty book is heavily dependent on interest rates.When interest rates decrease,a larger portion of our book of business turns over as more loans refinance.On the other hand,as interest
42、rates increase,fewer loans refinance and our book turns over more slowly.Since guaranty fees are set at the time a loan is originated,the impact of any change in guaranty fees on future revenues is dependent on the rate at which loans in our book of business turn over and new loans are originated.Bu
43、siness|IntroductionFannie Mae 2020 Form 10-K1Executive SummaryPlease read this summary together with our MD&A,our consolidated financial statements as of December 31,2020 and the accompanying notes.Summary of Our Financial PerformanceConsolidated Results(Dollars in billions)$21.8$21.9$25.3$16.0$14.2
44、$11.8$15.6$14.0$11.8$6.2$14.6$25.3Net revenuesNet incomeComprehensive incomeNet worth20020 vs.2019Net revenues increased$3.4 billion compared to 2019,primarily driven by an increase in net amortization income as a result of record levels of refinancing activity in 2020.Interest rates decl
45、ined to historically low levels in 2020 and remained low throughout the majority of the year.Due to this trend,refinance activity grew,resulting in approximately 38%of the loans in our single-family conventional guaranty book of business as of December 31,2020 being originated during the year.We exp
46、ect loans originated in the current environment will be less likely to refinance in the future,slowing the pace at which loans in our book of business turn over in future years.A slower turnover rate would limit the impact that changes in our guaranty fees have on our future revenues as any changes
47、would take longer to meaningfully impact the average charged guaranty fee on our total book of business.Net income decreased$2.4 billion compared to 2019,primarily driven by a shift from credit-related income to credit-related expense,driven by the economic dislocation caused by the COVID-19 pandemi
48、c and lower redesignation activity,as well as a reduction in investment gains driven by a decrease in the volume of reperforming loan sales.This was partially offset by the increase in net revenues from higher net amortization income discussed above.Net worth increased by$10.7 billion to$25.3 billio
49、n in 2020.The increase is attributed to$11.8 billion of comprehensive income for the twelve months ended December 31,2020 offset by a charge of$1.1 billion to retained earnings due to our implementation of Accounting Standards Update 2016-13,Financial InstrumentsCredit Losses,Measurement of Credit L
50、osses on Financial Instruments and related amendments(the“CECL standard”)on January 1,2020.See“Note 1,Summary of Significant Accounting PoliciesNew Accounting GuidanceThe Current Expected Credit Loss Standard”for further details on our implementation of the CECL standard.Our future net worth will be
51、 impacted by recent changes in our obligation to pay dividends to Treasury,which are described in“Conservatorship,Treasury Agreements and Housing Finance ReformTreasury Agreements.”Business|Executive SummaryFannie Mae 2020 Form 10-K22019 vs.2018Net revenues remained flat from 2018 to 2019.There was
52、an increase in guaranty fee income due to an increase in the size of our guaranty book of business,as well as an increase in our average guaranty fee charged,offset by a reduction in net interest income from our portfolio as we continued to reduce the size of our legacy assets.Net income decreased$1
53、.8 billion compared to 2018,primarily driven by a shift from fair value gains in 2018 to fair value losses in 2019 as a result of decreasing interest rates throughout most of 2019.Additionally,credit enhancement expenses grew as we increased the percentage of our guaranty book of business covered by
54、 credit risk transfer transactions.The decrease in net income was partially offset by an increase in investment gains due to an increase in gains on sales of single-family HFS loans and by an increase in credit-related income primarily driven by a decrease in actual and projected interest rates in 2
55、019.Net worth increased$8.4 billion in 2019.The increase is attributed to$14.0 billion of comprehensive income offset by$5.6 billion of dividends paid to the Treasury.Long-term financial performance.Our long-term financial performance will depend on many factors,including:the size of and our share o
56、f the U.S.mortgage market,which in turn will depend upon population growth,household formation and housing supply;borrower performance,the guaranty fees we charge,and changes in macroeconomic factors,including home prices and interest rates;andactions by FHFA,the Administration and Congress relating
57、 to our business and housing finance reform,including the capital requirements that will be applicable to us,our ongoing financial obligations to Treasury,restrictions on our activities and our business footprint,our competitive environment,and actions we are required to take to support borrowers or
58、 the mortgage market.As described further in“COVID-19 Impact”and“Risk Factors,”the COVID-19 pandemic has significantly affected our financial performance and we expect that it will continue to do so.Given the unprecedented nature of the COVID-19 pandemic,it is difficult to assess or predict the long
59、-term effects of the pandemic on our financial performance.COVID-19 ImpactIn March 2020,the COVID-19 outbreak in the United States was declared a national emergency.The COVID-19 pandemic resulted in stay-at-home orders,school closures and widespread business shutdowns across the country.Although bus
60、iness activity and community life have resumed to varying degrees,the future path of economic activity remains highly uncertain.The pandemic continues to have a significant impact on our business and on our financial results.We provide a brief overview below of the economic impact of the pandemic,ou
61、r response to it,and the pandemics impact on our business and financial results.Economic ImpactThe COVID-19 pandemic caused substantial financial market volatility and has significantly adversely affected both the U.S.and global economies.Although the economy has improved significantly since the sec
62、ond quarter of 2020,business activity remains below the level before the onset of the pandemic,and unemployment remains substantially higher than pre-pandemic levels.Continued high levels of new daily cases of COVID-19 in the U.S.,combined with concerns about the emergence of new,more infectious var
63、iants of the coronavirus,have led to new shut-downs in various locales and reductions in business activity,with increased risk of additional public-health measures.The federal government has taken and continues to take many actions to reduce the negative economic impact of the COVID-19 pandemic.For
64、example,the Federal Reserve lowered the federal funds rate and increased its purchases of Treasury and mortgage-backed securities,purchased corporate debt securities,and established and expanded liquidity facilities to support the flow of credit to consumers and businesses.In addition,the federal go
65、vernment passed legislation increasing and expanding unemployment benefits,providing direct cash payments to eligible taxpayers,allocating funds to assist businesses,states,and municipalities,and providing rental assistance,as well as mandating forbearance programs and eviction moratoriums.The disru
66、ption caused by the pandemic differs from previous economic downturns because of the high level of uncertainty related to the health and safety of consumers and workers.We expect the path and timing of economic recovery will be impacted by the success of vaccination efforts and fiscal stimulus.We be
67、lieve that sustained economic recovery depends on continued growth in consumer spending,increased business activity,and an associated reduction in unemployment,all of which impact the ability of borrowers and renters to make their monthly payments.The Business|Executive SummaryFannie Mae 2020 Form 1
68、0-K3pandemic resulted in a contraction in U.S.gross domestic product(“GDP”)in the first half of 2020 that was not entirely offset by growth in the second half of the year.See“MD&AKey Market Economic Indicators”for information on macroeconomic conditions during 2020 and our current forecasts regardin
69、g future macroeconomic conditions.Fannie Mae ResponseWe are taking a number of actions to help borrowers,renters,lenders and servicers manage the negative impact of the COVID-19 pandemic,including:providing payment forbearance(that is,a temporary suspension or reduction of the borrowers monthly mort
70、gage payments)to single-family and multifamily borrowers with COVID-19-related financial hardships;suspending most single-family foreclosures and evictions;conducting outreach efforts to provide borrowers and renters with information on the relief options available to them,including our#HeretoHelp m
71、edia campaign and updating our KnowYourO website;providing lenders and servicers temporary flexibilities for some of our Selling Guide and Servicing Guide requirements;and providing liquidity to lenders by purchasing a higher-than-usual volume of single-family loans through our whole loan conduit.We
72、 have also taken steps to mitigate the risk to Fannie Mae from the impacts of the pandemic,including the following:Selling Guide Changes.We have temporarily changed some of our Single-Family Selling Guide requirements to help ensure that up-to-date information is being considered to support the borr
73、owers ability to repay the loan,such as requiring more recent documentation of borrower employment,income and assets.Adverse Market Refinance Fee.We implemented a new adverse market refinance fee for single-family loans in light of the increased costs and risk we expect to incur due to the COVID-19
74、pandemic.This fee,which became effective in December 2020,is a one-time charge of 0.5%of the loan amount that the lender is required to pay at the time we acquire the loan.For every$1 billion in eligible refinance loans we acquire,we will collect$5 million in adverse market refinance fees.To help en
75、sure that the fee does not negatively impact our affordable housing mission,the fee only applies to eligible single-family loan refinances and does not apply to loans for home purchases,refinance loans with an original principal amount of less than or equal to$125,000,or certain HomeReady refinance
76、loans.The lender may choose whether to pass on all,some or none of the fee to the borrower.The new fee is intended to help us offset some of the higher projected expenses and risk due to COVID-19,including costs associated with the actions we are taking to help borrowers,lenders and servicers impact
77、ed by the pandemic,such as providing forbearances,suspending foreclosures and evictions,and offering repayment plans,payment deferrals and loan modifications.Additional Reserve Requirements.To address possible fluctuations in multifamily borrower income and expenses resulting from the COVID-19 pande
78、mic,we instituted additional reserve requirements for certain new multifamily loan acquisitions.See“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk Management”and“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk Management”for more information on the actions we are taking in res
79、ponse to the COVID-19 pandemic.We have also taken steps to help protect the safety and resiliency of our workforce.From mid-March through early October 2020,we required nearly all of our workforce to work remotely.In early October we began allowing employees,on a voluntary basis,to request approval
80、to return to work at some of our office locations and have established mandatory COVID-19 safety protocols for these locations.We expect a significant majority of our employees will continue to work remotely for the foreseeable future.To date,our business resiliency plans and technology systems have
81、 effectively supported this telework arrangement.Impact on our Business and Financial ResultsThe economic dislocation caused by the COVID-19 pandemic was the primary driver of the decline in our net income in 2020,as compared with 2019.We increased our allowance for loan losses to reflect our expect
82、ed loan losses as a result of the pandemic,which resulted in increased credit-related expenses.We are also incurring other costs associated with the pandemic,such as paying higher fees to servicers to support providing loss mitigation to borrowers and advancing principal and interest payments to MBS
83、 investors for loans in forbearance.As a result,we expect the COVID-19 pandemic to continue to negatively affect our financial results and our returns on capital.We did not enter into new credit risk transfer transactions in the second quarter of 2020 due to adverse market conditions resulting from
84、the COVID-19 pandemic.Market conditions improved in the second half of 2020,but we have Business|Executive Summary|COVID-19 ImpactFannie Mae 2020 Form 10-K4not entered into any new transactions as we evaluate their costs and benefits,including a reduction in the capital relief these transactions pro
85、vide under FHFAs enterprise regulatory capital framework.We may engage in credit risk transfer transactions in the future,which could help us manage capital and manage within our risk appetite,particularly given the growth and turnover in our book in 2020.The structure of and extent to which we enga
86、ge in any additional credit risk transfer transactions will be affected by the enterprise regulatory capital framework,our risk appetite,the strength of future market conditions,including the cost of these transactions,and the review of our overall business and capital plan.For information on these
87、transactions and their benefits and costs,see“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementCredit Enhancement and Transfer of Mortgage Credit Risk”and“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk ManagementTransfer of Multifamily Mortgage Credit Risk.”See“Legisl
88、ation and RegulationGSE Act and Other Legislative and Regulatory MattersCapital”for information on the enterprise regulatory capital framework.Also see“MD&ARetained Mortgage Portfolio,”“MD&ALiquidity and Capital Management”and“MD&ARisk Management”for discussions of the impact of the COVID-19 pandemi
89、c on our business.Our Mission and CharterOur MissionOur mission is to provide liquidity and stability to the residential mortgage market and to promote access to mortgage credit.This mission is derived from our corporate charter,which is the Federal National Mortgage Association Charter Act,or the C
90、harter Act.The Charter Act establishes the parameters under which we operate and our purposes,which are to:provide stability in the secondary market for residential mortgages;respond appropriately to the private capital market;provide ongoing assistance to the secondary market for residential mortga
91、ges(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 investments and improving the distribution of investment capital a
92、vailable for residential mortgage financing;andpromote access to mortgage credit throughout the nation(including central cities,rural areas and underserved areas)by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for residential mortgag
93、e financing.Our CharterThe Charter Act specifies that our operations are to be financed by private capital to the maximum extent feasible.We are expected to earn reasonable economic returns on all our activities.However,we may accept lower returns on certain activities relating to mortgages on housi
94、ng for low-and moderate-income families in order to support those segments of the market.We expect the lower returns to be offset by activities that yield higher returns.Principal balance limitations.To meet our purposes,the Charter Act authorizes us to purchase and securitize mortgage loans secured
95、 by single-family and multifamily properties.Our acquisitions of single-family conventional mortgage loans are subject to maximum original principal balance limits,known as“conforming loan limits.”The conforming loan limits are adjusted each year based on FHFAs housing price index.For 2020,the confo
96、rming loan limit for mortgages secured by one-family residences was set at$510,400,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 2021,FHFA increased the national c
97、onforming loan limit for one-family residences to$548,250.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
98、by the Federal Housing 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 p
99、urchase or securitize that has a loan-to-value(“LTV”)ratio over 80%at the time of purchase.The credit enhancement 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 t
100、he property 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 Business|Executive Summary|COVID-19 ImpactFannie Mae 2020 Form 10-K5Act does not req
101、uire us to obtain credit enhancement to purchase or securitize loans insured 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
102、 its agencies guarantees,directly or indirectly,our debt or mortgage-related 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.Exe
103、mption for our securities offerings.Our securities offerings are exempt from 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 trea
104、ted as exempt securities for purposes of Sections 12,13,14 or 16 of the Securities 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
105、-K.Our non-equity securities are exempt securities under the Exchange Act.Exemption 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
106、the payment of federal corporate income taxes.Limitations.We may not originate 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 pr
107、operties located in the United States and its territories.Liquidity Provided in 2020We provided over$1.4 trillion in liquidity to the mortgage market in 2020,which enabled the financing of approximately 6 million home purchases,refinancings or rental units.This represents our highest volume of singl
108、e-family and multifamily acquisitions on record.Fannie Mae Provided over$1.4 trillion in Liquidity in 2020 Unpaid Principal BalanceUnits$411B1.5MSingle-Family Home Purchases$948B 3.4MSingle-Family Refinancings$76B792KMultifamily Rental UnitsMortgage Securitizations We support market liquidity by iss
109、uing Fannie Mae MBS that are readily traded in the capital markets.We create Fannie Mae MBS by placing mortgage loans in a trust and 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 h
110、olders.We guarantee to the MBS trust that we will supplement amounts received 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 the three broad categories of our securitizati
111、on transactions and UMBS.Securitization TransactionsWe currently securitize a substantial majority of the single-family and multifamily mortgage loans we acquire.Our securitization transactions primarily fall within three broad categories:lender swap transactions,portfolio securitizations,and struct
112、ured securitizations.Business|Our Mission and CharterFannie Mae 2020 Form 10-K6Lender 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 in the primary mortgage market generall
113、y 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 characteristics.After receiving the mortgage l
114、oans 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 guarantee to each MBS trust that we will supplement amounts received by the MBS trust
115、as required to permit timely payment of principal and interest 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
116、 the trust,we make monthly distributions to the Fannie 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 i
117、n a manner similar to our Single-Family business.Our multifamily 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 mortgag
118、e loan into a Fannie Mae MBS facilitates its sale into the secondary market.Business|Mortgage SecuritizationsFannie Mae 2020 Form 10-K7Portfolio Securitization TransactionsWe also purchase mortgage loans and mortgage-related securities for securitization and sale at a later date through our“portfoli
119、o securitization transactions.”Most of our portfolio securitization transactions are driven by our single-family whole loan conduit activities,pursuant to which we purchase single-family whole loans from a large group of typically smaller lenders principally for the purpose of securitizing the loans
120、 into Fannie Mae MBS,which may then be sold to dealers and investors.Portfolio Securitization TransactionStructured Securitization TransactionsIn a“structured securitization transaction,”we create structured Fannie Mae MBS,typically for our lender customers or securities dealer customers,in exchange
121、 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 issuing Fannie Mae MBS in a structured securitization is similar to the process involved in our len
122、der 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,which provides additional liquidity and stability to the multifamily market,while expanding the inv
123、estor base for multifamily Fannie Mae MBS.Uniform Mortgage-Backed Securities,or UMBSOverviewIn May 2019,we began using the common securitization platform operated by Common Securitization Solutions,LLC(“CSS”),a limited liability company we own jointly with Freddie Mac,to perform certain aspects of t
124、he securitization process for our single-family Fannie Mae MBS issuances.In June 2019,we and Freddie Mac began issuing UMBS.The uniform mortgage-backed security is intended to maximize liquidity for both Fannie Mae and Freddie Mac mortgage-backed securities in the to-be-announced(“TBA”)market.UMBS a
125、nd Structured SecuritiesEach of Fannie Mae and Freddie Mac issues and guarantees UMBS and structured securities backed by UMBS and other securities,as described below.UMBS.Each of Fannie Mae and Freddie Mac issues and guarantees UMBS that are directly backed by the mortgage loans it has acquired,ref
126、erred to as“first-level securities.”UMBS issued by Fannie Mae are backed only by mortgage loans that Fannie Mae has acquired,and similarly UMBS issued by Freddie Mac are backed only by mortgage loans that Freddie Mac has acquired.There is no commingling of Fannie Mae-and Freddie Mac-acquired loans w
127、ithin UMBS.Mortgage loans backing UMBS are limited to fixed-rate mortgage loans eligible for financing through the TBA market.We continue to issue some types of Fannie Mae MBS that are not TBA-eligible and therefore are not Business|Mortgage SecuritizationsFannie Mae 2020 Form 10-K8issued as UMBS,su
128、ch as single-family Fannie Mae MBS backed by adjustable-rate mortgages and all multifamily Fannie Mae MBS.Structured Securities.Each of Fannie Mae and Freddie Mac also issues and guarantees structured mortgage-backed securities,referred to as“second-level securities,”that are resecuritizations of UM
129、BS or previously-issued structured securities.In contrast to UMBS,second-level securities can be commingledthat is,they can include both Fannie Mae securities and Freddie Mac securities as the underlying collateral for the security.These structured securities include Supers,which are single-class re
130、securitizations,and REMICs,which are multi-class resecuritizations.While Supers are backed only by TBA-eligible securities,REMICs can be backed by TBA-eligible or non-TBA-eligible securities.The key features of UMBS are the same as those of legacy single-family Fannie Mae MBS.Accordingly,all single-
131、family Fannie Mae MBS that are directly backed by fixed-rate loans and generally eligible for trading in the TBA market are UMBS,whether issued before or after June 3,2019,when we began issuing UMBS.In this report,we use the term“Fannie Mae-issued UMBS”to refer to single-family Fannie Mae MBS that a
132、re directly backed by fixed-rate mortgage loans and generally eligible for trading in the TBA market.We use the term“Fannie Mae MBS”or“our MBS”to refer to any type of mortgage-backed security that we issue,including UMBS,Supers,REMICs and other types of single-family or multifamily mortgage-backed s
133、ecurities.References to our single-family guaranty book of business in this report exclude Freddie Mac-acquired mortgage loans underlying Freddie Mac mortgage-related securities that we have resecuritized.Common Securitization PlatformThe common securitization platform operated by CSS has replaced c
134、ertain elements of Fannie Maes and Freddie Macs proprietary systems for securitizing single-family mortgages and performing associated back-office and administrative functions.The design of the common securitization platform also allows for the potential integration of additional market participants
135、 in the future.We no longer use our individual proprietary securitization function for our single-family MBS issuances.In addition to using the common securitization platform for our newly issued UMBS issuances,we are also now using the common securitization platform for certain ongoing administrati
136、ve functions for our previously issued and outstanding single-family Fannie Mae MBS.We do not use the common securitization platform operated by CSS for securitizing or performing associated administrative functions for our multifamily Fannie Mae MBS.We discuss risks posed by our reliance on CSS in“
137、Risk FactorsGSE and Conservatorship Risk.”Managing Mortgage Credit Risk Effectively pricing and managing credit risk is key to our business.Below we discuss key elements of how we are compensated for and manage the risk of credit losses through the life cycle of our loans and how we measure our cred
138、it risk.Loan Acquisition PoliciesLoans we acquire must be underwritten in accordance with our guidelines and standards.In Single-family,the vast majority of loans we acquire are assessed by Desktop Underwriter(DU),our proprietary single-family automated underwriting system.DU performs a comprehensiv
139、e evaluation of the primary risk factors of a mortgage.We regularly review DUs underlying models to determine whether its risk analysis and eligibility assessment appropriately reflect current market conditions and loan performance data to ensure the loans we acquire are consistent with our risk app
140、etite and FHFA guidance.New business restrictions recently added to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire and will also be considered in future reviews of DUs underlying models.In Multifamily,we acquire the vast majority o
141、f our loans through our Delegated Underwriting and Servicing(DUS)Program.DUS lenders,who must be pre-approved by us,are delegated the authority to underwrite and service loans for delivery to us in accordance with our standards and requirements.Based on a given loans unique characteristics and our e
142、stablished delegation criteria,lenders assess whether a loan must be reviewed by us.If review is required,our internal credit team will assess the loans risk profile to determine if it meets our risk tolerances.DUS lenders also share with us the risk of loss on our multifamily loans,thereby aligning
143、 our Business|Mortgage SecuritizationsFannie Mae 2020 Form 10-K9interests throughout the life of the loan.FHFA has instructed us to limit the volume and nature of multifamily loans we acquire,and the recent amendments to our senior preferred stock purchase agreement with Treasury include new covenan
144、ts with respect to our multifamily loan acquisition volume.We will continue to closely monitor our multifamily loan acquisitions and market conditions and,as appropriate,make changes to our standards and requirements to ensure the multifamily loans we acquire are consistent with our risk appetite,th
145、e senior preferred stock purchase agreement,and FHFA guidance.For more information about our mortgage acquisition policies and underwriting standards,see“MD&ASingle-family BusinessSingle-family Mortgage Credit Risk Management”and“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk Management.”F
146、or information on the restrictions on our single-family and multifamily loan acquisitions,see“Conservatorship,Treasury Agreements and Housing Finance ReformTreasury AgreementsCovenants under Treasury Agreements”and“MD&AMultifamily BusinessMultifamily Business Metrics.”In exchange for managing credit
147、 risk on the loans we acquire,we receive guaranty fees that take into account,among other factors,the credit risk characteristics of the loans we acquire.We provide information about our guaranty fees in MD&ASingle-family BusinessSingle-family Business Metrics”and in“MD&AMultifamily BusinessMultifam
148、ily Business Metrics.”Loan Performance ManagementWe closely monitor the performance of loans in our guaranty book of business and we work to reduce defaults and mitigate the severity of credit losses through our servicing policies and practices.Single-family LoansFor single-family loans,the most imp
149、ortant loan performance criteria we monitor are(1)serious delinquency rates,which are typically strong indicators of loans that are at a heightened risk of default,and(2)mark-to-market LTV ratios,which affect both the likelihood of losses and the potential severity of any losses we may ultimately re
150、alize.While mark-to-market LTV ratios are significantly impacted by changes in home prices,which are outside our control,we have an array of loss mitigation tools to try to reduce defaults on delinquent loans and to minimize the severity of the losses we do incur.We consider single-family loans to b
151、e seriously delinquent when they are 90 days or more past due or in the foreclosure process.Once a single-family loan becomes 36 days past due,the servicer is required to make weekly attempts,for the next six months,to contact the borrower to try to engage in steps to prevent default.Our loss mitiga
152、tion tools include payment forbearance,repayment plans,payment deferrals and loan modification options.We describe these tools and discuss them further in“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementSingle-Family Problem Loan ManagementLoan Workout Metrics.”Successful loan
153、 reperformance is heavily influenced by the effective use of these tools and the amount of equity the borrower has in their home.Some loans that become seriously delinquent subsequently become current or repay in full without a modification or other loan workout.However,we modify a substantial porti
154、on of our seriously delinquent loans.For example,of the single-family loans that became seriously delinquent from 2017 to 2019,through December 31,2020,33%became current or fully repaid without a loan workout,while we performed loan workouts,including modifications,on 38%of them.Of these loans that
155、received a workout,70%became current or fully repaid as of December 31,2020,including loans that became current and were subsequently sold in a reperforming loan sale,and 1%defaulted through foreclosure,a short sale or a deed-in-lieu of foreclosure.The reperformance of these previously worked-out lo
156、ans has been negatively impacted in 2020 by the COVID-19 pandemic,with approximately 13%of the population in a forbearance plan as of December 31,2020 and past due.When a loan does not cure on its own and we are not able to provide a workout for it,the likelihood of default increases.See“MD&ASingle-
157、Family BusinessSingle-Family Mortgage Credit Risk Management”for performance statistics on our single-family completed loan modifications during 2019 and 2018.In 2020 our loss mitigation pivoted to payment forbearance,providing up to a year to borrowers affected by the COVID-19 pandemic.For loans al
158、ready in a COVID-19-related forbearance as of February 28,2021,forbearance can be extended to a total of up to 15 months,provided that the forbearance does not result in the loan becoming greater than 15 months delinquent.Forbearance is typically used in instances where the duration and impact of a
159、borrowers hardship are uncertain,such as disasters like hurricanes and flooding,to give the borrower time to understand whether,and to what extent,a loss mitigation solution will be needed to return to paying status.We estimate that,through December 31,2020,our single-family cumulative forbearance t
160、ake-up rate was approximately 8%.We discuss this rate in“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementSingle-Family Problem Loan ManagementSingle-Family Business|Managing Mortgage Credit RiskFannie Mae 2020 Form 10-K10Loans in Forbearance.”As of December 31,2020,3.4%of our
161、single-family conventional book of business,based on unpaid principal balance,and 3.0%based on loan count,remained in active forbearance,the vast majority of which were related to COVID-19,and 12%of these loans in forbearance,based on loan count,were still current.The majority of our single-family l
162、oans that exited forbearance during the year either repaid all missed payments or received a payment deferral solution.We expect the ultimate performance of these loans will be influenced by the success of these payment deferrals as well as our other loss mitigation options.Because payments are not
163、required during forbearance,our serious delinquency rate has increased.For delinquent loans that are unable to reperform,we use alternatives to foreclosure where possible,such as short sales,which reduce our credit losses while helping borrowers avoid foreclosure.We provide more information on short
164、 sales and our other foreclosure alternatives in“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementSingle-Family Problem Loan ManagementLoan Workout MetricsForeclosure Alternatives.”We work to obtain the highest price possible for the properties sold in short sales.When we acqui
165、re properties,including through foreclosure,our primary objectives are both to minimize the severity of loss to Fannie Mae by maximizing sales prices and to stabilize neighborhoods by preventing empty homes from depressing home values.The value of the underlying property relative to the loans unpaid
166、 principal balance has a significant impact on the severity of loss we incur as a result of loan default.As of December 31,2020,the estimated weighted average mark-to-market LTV ratio of loans in our single-family conventional book of business was 58%,and less than 0.5%of these loans had an estimate
167、d mark-to-market LTV ratio above 100%.In recent years,our credit loss mitigation strategy has also involved selling nonperforming and reperforming loans thereby removing them from our guaranty book of business.We suspended new sales of nonperforming and reperforming loans in the second quarter of 20
168、20,as investor interest in purchasing these loans was severely impacted by the COVID-19 pandemic.However,market conditions for the sale of these loans,particularly reperforming loans,improved following the second quarter,and we resumed sales of reperforming loans in the third quarter.FHFA is current
169、ly examining issues relating to sales of nonperforming and reperforming loans during the COVID-19 national emergency and has instructed us to refrain from engaging in such sales until at least February 28,2021,or later if directed by FHFA,while FHFA evaluates what additional loss mitigation requirem
170、ents will apply to any future sales.For instance,although we already require purchasers to perform workout solutions like modifications to try to avoid foreclosure,we may attach additional terms to these sales that would require purchasers to offer borrowers protections included in existing legislat
171、ion.We present information on the credit characteristics and performance of our single-family loans in“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementSingle-Family Portfolio Diversification and Monitoring”and“Single-Family Problem Loan Management”and“Note 13,Concentrations of
172、 Credit RiskRisk Characteristics of our Guaranty Book of Business.”Multifamily LoansFor multifamily loans,key indicators of heightened risk of default are debt service coverage ratios(“DSCRs”),particularly loans with an estimated current DSCR below 1.0,and serious delinquency rates.We consider a mul
173、tifamily loan seriously delinquent when it is 60 days or more past due.For loans with indicators of heightened default risk,our DUS lenders,through their delegated authority,work with us to maintain the credit quality of the multifamily book of business and prevent foreclosures through loss mitigati
174、on strategies such as payment forbearance or loan modification.For loans that ultimately default,we work to minimize the severity of loss in several ways,including pursuing contractual remedies through our DUS loss-sharing arrangements and with providers of additional credit enhancements where avail
175、able.Similar to single-family,we have relied heavily on payment forbearance,up to six months of which may be provided by lenders under delegated authority.For any forbearance request extending beyond six months,Fannie Mae does not delegate the decision and will determine whether to extend relief.As
176、of December 31,2020,0.4%of our Multifamily guaranty book of business based on unpaid principal balance was in an active forbearance,the vast majority of which were related to COVID-19.We present information on the credit characteristics and performance of our multifamily loans in“MD&AMultifamily Bus
177、inessMultifamily Mortgage Credit Risk ManagementMultifamily Portfolio Diversification and Monitoring”and“Note 13,Concentrations of Credit RiskRisk Characteristics of our Guaranty Book of Business.”Business|Managing Mortgage Credit RiskFannie Mae 2020 Form 10-K11Sharing and Selling Credit Risk In add
178、ition to managing credit risk through our selling and servicing practices,we also share and transfer credit risk to third parties through a variety of credit enhancement products and programs.For single-family loans we acquire with an LTV ratio over 80%our charter requires credit enhancement,which w
179、e typically meet through third-party primary mortgage insurance.Our Multifamily business uses a shared-risk business model that distributes credit risk to the private markets,primarily through our DUS program.Under DUS,our lenders typically share with us approximately one-third of the credit risk on
180、 these loans,aligning the interests of lenders and Fannie Mae.DUS lenders receive credit risk-related compensation in exchange for sharing risk.The lender risk-sharing we obtain through our DUS program accompanies our multifamily loans at the time we acquire them.We use other types of credit enhance
181、ments,including pool mortgage insurance and credit risk transfer transactions.In our credit risk transfer transactions,we use risk-sharing capabilities we have developed to obtain credit enhancement by transferring portions of our single-family and multifamily mortgage credit risk on reference pools
182、 of mortgage loans to the private market.In most of our credit risk transfer transactions,investors receive payments,which effectively reduce the guaranty fee income we retain on the loans.In exchange for these payments,our credit risk transfer transactions are designed to transfer to the investors
183、a portion of the losses we expect would be incurred in an economic downturn or a stressed credit environment.We did not enter into new credit risk transfer transactions in the second quarter of 2020 due to adverse market conditions resulting from the COVID-19 pandemic.Market conditions improved in t
184、he second half of 2020,but we have not entered into any new transactions as we evaluate their costs and benefits.We may engage in credit risk transfer transactions in the future.For more information about our loans with credit enhancement,see“MD&ASingle-Family BusinessSingle-Family Mortgage Credit R
185、isk ManagementSingle-Family Credit Enhancement and Transfer of Mortgage Credit Risk”and“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk ManagementTransfer of Multifamily Mortgage Credit Risk.”Measuring Credit Risk and the Impact of Changes on Our Quarterly ResultsOur best estimate of future
186、 credit losses is reflected in our single-family and multifamily loss reserves,which for periods on or after January 1,2020 is calculated using a lifetime credit loss methodology under the CECL standard.We update our estimate of credit losses quarterly based on the credit profile of our loans as wel
187、l as certain actual and forecasted economic data.Changes in our estimate affect our benefit or provision for credit losses,which,combined with foreclosed property expense,comprises our credit-related income or expense each quarter.We provide information on our loss reserves in“Selected Financial Dat
188、a”and in“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk ManagementSingle-Family Problem Loan ManagementOther Single-Family Credit information”and“MD&AMultifamily BusinessMultifamily Mortgage Credit Risk ManagementMultifamily Problem Loan Management and Foreclosure PreventionOther Multi
189、family Credit information.”We provide information on our credit related income or expense in“MD&AConsolidated Results of OperationsCredit-Related Income(Expense).”Conservatorship,Treasury Agreements and Housing Finance Reform Conservatorship On September 6,2008,the Director of FHFA appointed FHFA as
190、 our conservator,pursuant to authority provided by 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 c
191、onserve our assets and property and put the company in a sound and solvent condition.The conservatorship has no specified termination date.For more information on the risks to our business relating to the conservatorship and uncertainties regarding the future of our company and business,as well as t
192、he adverse effects of the conservatorship on the rights of holders of our common and preferred stock,see“Risk FactorsGSE and Conservatorship Risk.”Our conservatorship could terminate through a receivership.For information on the circumstances under which FHFA is required or permitted to place us int
193、o receivership and the potential consequences of receivership,see“Legislation and Business|Managing Mortgage Credit RiskFannie Mae 2020 Form 10-K12RegulationGSE Act and Other Legislative and Regulatory MattersReceivership and Resolution Planning”and“Risk FactorsGSE and Conservatorship Risk.”Manageme
194、nt of the Company during Conservatorship Upon its appointment,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 asset
195、s of any other legal custodian of Fannie Mae.The conservator 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
196、 retains the authority to amend or withdraw its order and instructions 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 director
197、s serve on behalf of the conservator and exercise their authority 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 t
198、he company,the holders of our equity or debt securities,or the 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
199、 eliminated common and preferred stock dividends(other than 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
200、 or enter into contracts on our behalf.Further,FHFA may transfer 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,mortga
201、ge loans and mortgage-related assets that have been transferred to a Fannie Mae MBS trust must be held by the conservator for the beneficial owners of 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 wit
202、h Treasury change our obligation to make required payments on 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 t
203、o which we issued to Treasury one million shares of Variable 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
204、fully diluted basis at the time the warrant is exercised for a nominal price.The senior preferred stock purchase agreement and the dividend and liquidation provisions of the senior preferred stock were amended in January 2021 pursuant to a letter agreement between us,through FHFA in its capacity as
205、conservator,and Treasury.The terms of the agreement,including Treasurys funding commitment,and the dividend and liquidation provisions of the senior preferred stock are described more fully below.The January 2021 letter agreement made a number of significant changes to the covenants in the senior pr
206、eferred stock purchase agreement,as well as to the terms of the senior preferred stock,including the following:The dividend provisions of the senior preferred stock were amended to permit us to retain increases in our net worth until our net worth exceeds the amount of adjusted total capital necessa
207、ry for us to meet the capital requirements and buffers under the enterprise regulatory capital framework discussed in“Legislation and RegulationGSE Act and Other Legislative and Regulatory MattersCapital.”We estimate that,had the enterprise regulatory capital framework been applicable to us as of De
208、cember 31,2020,we would have been required to hold approximately$185 billion in adjusted total capital,of which approximately$135 billion must be in the form of common equity tier 1 capital.After the“capital reserve end date,”which is defined as the last day of the second consecutive fiscal quarter
209、during which we have maintained capital equal to,or in excess of,all of the capital requirements and buffers under the enterprise regulatory capital framework,the amount of quarterly dividends to Treasury will be equal to the lesser of any quarterly increase in our net worth and a 10%annual rate on
210、the then-current liquidation preference of the senior preferred stock.As a result of these changes,our ability to retain earnings in excess of the capital requirements and buffers set forth in the enterprise regulatory capital framework will be limited.Business|Conservatorship,Treasury Agreements an
211、d Housing Finance ReformFannie Mae 2020 Form 10-K13At the end of each fiscal quarter,through and including the capital reserve end date,the liquidation preference of the senior preferred stock will be increased by an amount equal to the increase in our net worth,if any,during the immediately prior f
212、iscal quarter.We may issue and retain up to$70 billion in proceeds from the sale of common stock without Treasurys prior consent,provided that(1)Treasury has already exercised its warrant in full,and(2)all currently pending significant litigation relating to the conservatorship and to an amendment t
213、o the senior preferred stock purchase agreement made in August 2012 has been resolved,which may require Treasurys assent.FHFA may release us from conservatorship without Treasurys consent after(1)all currently pending significant litigation relating to our conservatorship and the August 2012 amendme
214、nt to the senior preferred stock purchase agreement has been resolved,and(2)our common equity tier 1 capital,together with any other common stock that we may issue in a public offering,equals or exceeds 3%of our“adjusted total assets”under our enterprise regulatory capital framework.We estimate that
215、,had the new framework been applicable to us as of December 31,2020,3%of our adjusted total assets would have been approximately$124 billion.New restrictive covenants were added that will impact both our single-family and multifamily business activities.See“Risk Factors”for a description of the risk
216、s to our business relating to the senior preferred stock purchase agreement,as well as the adverse effects of the senior preferred stock and the warrant on the rights of holders of our common stock and other series of preferred stock.Senior Preferred Stock Purchase AgreementThe senior preferred stoc
217、k purchase agreement provides that,on a quarterly 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
218、(“GAAP”),for the applicable fiscal quarter(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 Trea
219、sury under the agreement with respect to a 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 receivershi
220、p or other liquidation process.The senior preferred stock purchase agreement provides for the payment of an unspecified quarterly commitment fee to Treasury to compensate Treasury for its ongoing support under the senior preferred stock purchase agreement.As amended by the January 2021 letter agreem
221、ent,the agreement provides that(1)through and continuing until the capital reserve end date,the periodic commitment fee will not be set,accrue,or be payable,and(2)not later than the capital reserve end date,we and Treasury,in consultation with the Chair of the Federal Reserve,will agree to set the p
222、eriodic commitment fee.Treasurys 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 Trea
223、surys obligations under its 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 add
224、ition,Treasury may terminate 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.In the event of our default on payments with r
225、espect 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,the agreement provides that any holder of such defaulted debt securi
226、ties 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 under the senior prefer
227、red 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.Most provisions of the senior preferred stock purch
228、ase agreement may be waived or amended by mutual agreement of the parties;however,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
229、 material respect the holders of our debt securities or guaranteed Fannie Mae MBS.Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K14Senior Preferred StockShares of the senior preferred stock have no par value and have a stated value and initial liquida
230、tion preference equal to$1,000 per share,for an aggregate initial liquidation preference of$1 billion.As a result of the January 2021 letter agreement,the dividend rate and liquidation preference of the senior preferred stock depend on whether we have reached the capital reserve end date.Treasury,as
231、 the holder of the senior preferred stock,is entitled to receive,when,as and if declared,out of legally available funds,cumulative quarterly cash dividends.The dividends we have paid to Treasury on the senior preferred stock during conservatorship have been declared by,and paid at the direction of,o
232、ur conservator,acting as successor to the rights,titles,powers and privileges of the Board of Directors.Dividend payments we make to Treasury do not restore or increase the amount of funding available to us under the senior preferred stock purchase agreement.Dividend amount prior to capital reserve
233、end date.The terms of the senior preferred stock provide for dividends each quarter in the amount,if any,by which our net worth as of the end of the immediately preceding fiscal quarter exceeds an applicable capital reserve amount.The January 2021 letter agreement increased the applicable capital re
234、serve amount,starting with the quarterly dividend period ending on December 31,2020,from$25 billion to the amount of adjusted total capital necessary for us to meet the capital requirements and buffers set forth in enterprise regulatory capital framework.If our net worth does not exceed this amount
235、as of the end of the immediately preceding fiscal quarter,then dividends will neither accumulate nor be payable for such period.Our net worth is defined as the amount,if any,by which our total assets(excluding Treasurys funding commitment and any unfunded amounts related to the commitment)exceed our
236、 total liabilities(excluding any obligation with respect to capital stock),in each case as reflected on our balance sheet prepared in accordance with GAAP.Dividend amount following capital reserve end date.Beginning on the first dividend period following the capital reserve end date,the applicable q
237、uarterly dividend amount on the senior preferred stock will be the lesser of:(1)a 10%annual rate on the then-current liquidation preference of the senior preferred stock;and(2)an amount equal to the incremental increase in our net worth during the immediately prior fiscal quarter.However,the applica
238、ble quarterly dividend amount will immediately increase to a 12%annual rate on the then-current liquidation preference of the senior preferred stock if we fail to timely pay dividends in cash to Treasury.This increased dividend amount will continue until the dividend period following the date we hav
239、e paid,in cash,full cumulative dividends to Treasury(including any unpaid dividends),at which point the applicable quarterly dividend amount will revert to the prior calculation method.Liquidation preference.Under the terms governing the senior preferred stock,the aggregate liquidation preference is
240、 increased by the following: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 paya
241、ble,nor will they under the current terms of the senior preferred stock purchase agreement and the senior preferred stock);andany dividends that are payable but not paid in cash to Treasury,regardless of whether or not they are declared.In addition:amendments to the terms of the senior preferred sto
242、ck made in December 2017 increased the aggregate liquidation preference of the senior preferred stock by$3 billion as of December 31,2017;amendments to the terms of the senior preferred stock made in September 2019 letter agreement provides that,beginning on September 30,2019,and at the end of each
243、fiscal quarter thereafter,the liquidation preference shall be increased by an amount equal to the increase in our net worth,if any,during the immediately prior fiscal quarter,until such time as the liquidation preference has increased by$22 billion pursuant to this provision;andthe January 2021 lett
244、er agreement revised these terms to provide that,at the end of each fiscal quarter through and including the capital reserve end date,the liquidation preference shall be increased by an amount equal to the increase in our net worth,if any,during the immediately prior fiscal quarter.The senior prefer
245、red 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 cur
246、rent liquidation preference before any distribution is made to the holders of our common stock or other preferred stock.The aggregate liquidation preference Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K15of the senior preferred stock was$142.2 billi
247、on as of December 31,2020.It will increase to$146.8 billion as of March 31,2021 due to the increase in our net worth during the fourth quarter of 2020.The senior preferred stock provides that we may not,at any time,declare or pay dividends on,make distributions with respect to,or redeem,purchase or
248、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 preference)have been declared a
249、nd 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 have no general or specia
250、l 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 of the senior preferred
251、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 agreement.Moreover,we are not
252、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 previously added to the liquidat
253、ion 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,with the exception of up to$70 billion in aggregate gross cash proceeds from the issuance of c
254、ommon stock,must be used to pay down the liquidation preference of the senior preferred stock.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
255、funding commitment,we may pay down the liquidation preference of all outstanding shares of senior preferred stock at any time,in whole or in part.Net Worth,Treasury Funding and Senior Preferred Stock Dividends The charts below show information about our net worth,the remaining amount of Treasurys fu
256、nding commitment to us,senior preferred stock dividends we have paid Treasury and funds we have drawn from Treasury pursuant to its funding commitment.Net Worth and TreasuryFunding Commitment(Dollars in billions)$25.3$113.9Net worthRemaining Treasury funding commitmentAs of December 31,2020Dividend
257、Payments and Draws(Dollars in billions)$181.4$119.8Cumulative dividend payments to TreasuryCumulative draws from TreasuryAs of December 31,2020(1)Aggregate amount of dividends we have paid to Treasury on the senior preferred stock from 2008 through December 31,2020.Under the terms of the senior pref
258、erred stock purchase agreement,dividend payments we make to Treasury do not offset our draws of funds from Treasury.(2)Aggregate amount of funds we have drawn from Treasury pursuant to the senior preferred stock purchase agreement from 2008 through December 31,2020.Common Stock WarrantPursuant to th
259、e 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 the total number of shares of our common stock outstanding on a fully diluted basis on the date the warr
260、ant is exercised,for an exercise Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K16price 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 senior pref
261、erred 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 equity
262、 securities,except for stock issuances made(1)to Treasury,(2)pursuant to obligations that existed at the time we entered conservatorship,and(3)as amended by the January 2021 letter agreement,for common stock ranking pari passu or junior to the common stock issued to Treasury in connection with the e
263、xercise of its warrant,provided that(i)Treasury has already exercised its warrant in full,and(ii)all currently pending significant litigation relating to the conservatorship and the August 2012 amendment to the senior preferred stock purchase agreement has been resolved,which may require Treasurys a
264、ssent.Net proceeds of the issuance of any shares of capital stock for cash while the senior preferred stock is outstanding,except for up to$70 billion in aggregate gross cash proceeds from the issuance of common stock,must be used to pay down the liquidation preference of the senior preferred stock;
265、terminating or seeking to terminate our conservatorship,other than through a receivership,except that,as revised by the January 2021 letter agreement,FHFA can terminate our conservatorship without the prior consent of Treasury if several conditions are met,including(1)all currently pending significa
266、nt litigation relating to the conservatorship and the August 2012 amendment to the senior preferred stock purchase agreement has been resolved,and(2)for two or more consecutive quarters,our common equity tier 1 capital(as defined in the enterprise regulatory capital framework),together with any stoc
267、kholder equity that would result from a firm commitment public underwritten offering of common stock which is fully consummated concurrent with the termination of conservatorship,equals or exceeds at least 3%of our adjusted total assets(as defined in the enterprise regulatory capital framework);sell
268、ing,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 assets have a fair market value individually or in the
269、aggregate of less than$250 million;andissuing subordinated debt.Covenants in the senior preferred stock purchase agreement also subject us to limits on the amount of mortgage assets that we may own and the total amount of our indebtedness.Mortgage Asset Limit.The amount of mortgage assets we are per
270、mitted to own is$250 billion and,as a result of the January 2021 letter agreement,will decrease to$225 billion on December 31,2022.We are currently managing our business to a$225 billion cap pursuant to instructions from FHFA.Our mortgage assets as of December 31,2020 were$165.0 billion.Our mortgage
271、 asset calculation also includes 10%of the notional value of interest-only securities we hold.We disclose the amount of our mortgage assets each month in the“Endnotes”to our Monthly Summaries,which are available on our website and announced in a press release.Debt Limit.Our debt limit under the seni
272、or preferred 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.This debt limit is currently$300 billion,and it will decrease to$270 billion as of December 31,2022.As calculated
273、for this purpose,our indebtedness as of December 31,2020 was$290.0 billion.We disclose the amount of our indebtedness 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.Another covenant prohibits us
274、 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 Commission(“SEC”)rules)without the consent of the Director of FHFA,in consultation with th
275、e Secretary of the Treasury.In addition to the changes described above to covenants already in the senior preferred stock purchase agreement,the January 2021 letter agreement added additional covenants:We are required to comply with the terms of the enterprise regulatory capital framework as publish
276、ed by FHFA in the Federal Register on December 17,2020,disregarding any subsequent amendments or modifications.Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K17New Business Restrictions.New restrictive covenants impact both our single-family and multi
277、family business activities:Limit on Multifamily Volume.We may not acquire more than$80 billion in multifamily mortgage assets in any 52-week period.FHFA will adjust the dollar amount of this limitation on multifamily mortgage purchase activity up or down at the end of each calendar year based on cha
278、nges to the consumer price index.Additionally,at least 50%of our multifamily acquisitions in any calendar year must,at the time of acquisition,be classified as mission-driven,consistent with FHFA guidelines.In the fourth quarter of 2020,FHFA established a 2021 multifamily volume cap of$70 billion in
279、 new business volume over the four-quarter period from January 1,2021 through December 31,2021.FHFA also announced the requirement that at least 50%of our 2021 multifamily business volume must be mission-driven,focused on certain affordable and underserved market segments.For more information about
280、our multifamily new business volume,see“MD&AMultifamily BusinessMultifamily Business Metrics.”We understand that the$70 billion multifamily volume cap and related requirements established by FHFA in the fourth quarter of 2020 remain in effect for calendar year 2021,and that the$80 billion limit on m
281、ultifamily mortgage purchase activity established under the January 2021 letter agreement operates as an independent limit on our prospective multifamily loan acquisitions.Requirement to Provide Equitable Access for Single-Family Acquisitions.We:may not vary our pricing or acquisition terms for sing
282、le-family loans based on the business characteristics of the seller,including the sellers size,charter type,or volume of business with us;and must offer to purchase at all times,for equivalent cash consideration and on substantially the same terms,any single-family mortgage loan that(1)is of a class
283、 of loans that we then offer to acquire for inclusion in our mortgage-backed securities or for other non-cash consideration,(2)is offered by a seller that has been approved to do business with us,and(3)has been originated and sold in compliance with our underwriting standards.Single Counterparty Vol
284、ume Cap on Single-Family Acquisitions for Cash.Beginning on January 1,2022,and thereafter,we may not acquire more than$1.5 billion in single-family loans for cash consideration from any single seller(including its affiliates)during any period comprising four calendar quarters.Limit on Specified High
285、er-Risk Single-Family Acquisitions.We may not acquire a single-family mortgage loan if,following the acquisition,more than 3%of our single-family loans that result from a refinancing,or 6%of our single family loans that do not result from a refinancing,in each case,that we have acquired during the p
286、receding 52-week period,would have two or more of the following higher-risk characteristics at origination:a combined loan-to-value ratio greater than 90%;a debt-to-income ratio greater than 45%;and a FICO credit score(or equivalent credit score)less than 680.Limit on Acquisitions of Single-Family M
287、ortgage Loans Backed by Second Homes and Investment Properties.We must limit our acquisitions of single-family mortgage loans secured by either second homes or investment properties to not more than 7%of the single-family mortgage loans we have acquired during the preceding 52-week period.Single-Fam
288、ily Loan Eligibility Requirements Program.Beginning on or prior to July 1,2021,we must implement a program reasonably designed to ensure that the single-family loans we acquire are limited to:qualified mortgages,except government-backed loans;loans exempt from the Consumer Financial Protection Burea
289、us(the“CFPBs”)ability-to-repay and qualified mortgage rule,except timeshares and home equity lines of credit;loans secured by an investment property;refinancing loans with streamlined underwriting originated in accordance with our eligibility criteria for high loan-to-value refinancings;loans origin
290、ated with temporary underwriting flexibilities during times of exigent circumstances,as determined in consultation with FHFA;Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K18loans secured by manufactured housing;andsuch other loans that FHFA may desig
291、nate that were eligible for purchase by us as of the date of the January 2021 letter agreement.We are assessing the operational and business impacts of these new covenants and our compliance with them,including how these new limitations will impact,and may require changes to,our underwriting standar
292、ds and requirements for acquisitions of single-family and multifamily loans.These changes may impact the overall volume and types of loans we acquire in 2021.As of the date of this filing,based on interpretive guidance we have received from FHFA to date and an initial assessment of our acquisition a
293、ctivities,we are not currently in compliance with the new covenants that restrict our acquisitions of purchase money single-family loans with higher-risk characteristics and our acquisitions of single-family loans backed by investment properties and second homes,measured during the preceding 52-week
294、 period.We are working with FHFA on resolving any remaining interpretive issues and discussing a timetable to be fully compliant with these covenants.Annual Risk Management Plan Covenant.Each year we remain in conservatorship we are required to provide Treasury a risk management plan that sets out o
295、ur 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 our most re
296、cent annual risk management plan to Treasury in December 2020.Although the senior preferred stock purchase agreement does not specify penalties for failure to comply with the covenants in the agreement,FHFA,as our conservator and regulator,has the authority to direct compliance and to impose consequ
297、ences for noncompliance.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 in that system.Congress may consider proposed housing finance
298、 reform legislation that could result in significant changes in our structure and role in the future,including proposals that would result in Fannie Maes liquidation or dissolution.The January 2021 letter agreement includes a commitment for us and Treasury to work toward developing a proposal to res
299、tructure Treasurys interests in us in a manner that meets three goals:(1)facilitating an orderly exit from conservatorship,(2)ensuring that Treasury is appropriately compensated,and(3)permitting us to raise third-party capital and make distributions as appropriate.The January 2021 letter agreement s
300、tates that Treasury,in consultation with FHFA,should endeavor to transmit this proposal to both Houses of Congress by September 30,2021.At the same time the January 2021 letter agreement was announced,Treasury issued a Blueprint on Next Steps for GSE Reform.Indicating that“Congress is best positione
301、d to adopt comprehensive housing finance reform,”Treasury addressed five key considerations in the blueprint that should inform Treasurys continued work with FHFA to meet the goals described above:build GSE equity capital,determine GSE capital structure,set commitment fee for ongoing government supp
302、ort,establish appropriate pricing oversight,and assess appropriate market concentration.In the blueprint,Treasury indicated that,among other things,consideration should be given to whether consolidating our and Freddie Macs operations into a single entity would more efficiently fulfill our mission a
303、nd promote the interests of stakeholders,including taxpayers.It is unclear how or whether Treasury in the current Administration will prioritize or act on the commitments set forth in the letter agreement or the considerations set forth in the Blueprint.There continues to be significant uncertainty
304、regarding the timing,content and impact of future legislative and regulatory actions affecting us,including the enactment of housing finance reform legislation.See“Risk FactorsGSE and Conservatorship Risk”for a description of risks associated with our future and potential housing finance reform.Legi
305、slation and Regulation U.S.Government Response to COVID-19Congress has passed several pieces of legislation to address the economic dislocation and other burdens resulting from the COVID-19 pandemic:The Coronavirus Aid,Relief,and Economic Security Act,referred to as the CARES Act,was enacted in Marc
306、h 2020.The Consolidated Appropriations Act of 2021 was enacted in December 2020.Business|Conservatorship,Treasury Agreements and Housing Finance ReformFannie Mae 2020 Form 10-K19Relief for Individuals and Businesses;Federal Eviction MoratoriumsThe CARES Act included a number of provisions aimed at p
307、roviding relief for individuals and businesses that applied to the loans we guarantee,including provisions requiring that our servicers:provide forbearance(that is,a temporary suspension of the borrowers monthly mortgage payments)for up to 360 days upon the request of any single-family borrower expe
308、riencing a financial hardship caused by the COVID-19 pandemic,regardless of the borrowers delinquency status and with no additional documentation required other than the borrowers attestation to a financial hardship caused by the COVID-19 pandemic;through December 31,2020,provide forbearance for up
309、to 90 days upon the request of any multifamily borrower experiencing a documented financial hardship due to the COVID-19 pandemic that was current on its payments as of February 1,2020;during the forbearance period,multifamily borrowers may not evict tenants for nonpayment,issue notices to vacate,or
310、 charge fees for late payment of rent;andsuspend foreclosures and foreclosure-related evictions for single-family properties through May 17,2020,other than for vacant or abandoned properties.The CARES Act instituted a temporary moratorium,through July 25,2020,on tenant evictions for nonpayment of re
311、nt that applied to any single-family or multifamily property that secures a mortgage loan we own or guarantee.To prevent the further spread of COVID-19 the Centers for Disease Control and Prevention(the“CDC”)issued an order in September 2020 prohibiting the eviction of any tenant,lessee or resident
312、of a residential property for nonpayment of rent,if such person provides a specified declaration attesting that they meet the requirements to obtain the protection of the order.The CDCs moratoriums initially expired on December 31,2020,but it was subsequently extended by the Consolidated Appropriati
313、ons Act of 2021 through January 31,2021.In January 2021,the CDC extended the eviction moratorium through March 31,2021.The requirements to obtain the protection of the order include a specified income cap and an inability to pay full rent.The CDC order does not apply in any jurisdiction with a morat
314、orium on residential evictions that provides the same or greater level of public-health protection.While the CDC order does not impose any obligations on Fannie Mae or its servicers to ensure compliance by borrowers,a borrowers income may be impacted by tenants who do not pay their rent while under
315、the protection of the CDC order.As a result and as described in“Risk Factors,”these eviction moratoriums could adversely affect the ability of some of our borrowers to make payments on their loans.See“MD&ASingle-Family BusinessSingle-Family Mortgage Credit Risk Management”and“MD&AMultifamily Busines
316、sMultifamily Mortgage Credit Risk Management”for more information on the actions we have taken and are taking to provide forbearance and suspend foreclosures and evictions,including beyond the requirements under the CARES Act.Accounting for Troubled Debt RestructuringsThe CARES Act also allows finan
317、cial institutions to elect temporary relief relating to the accounting for troubled debt restructurings(“TDRs”).The CARES Act provides that a financial institution may elect to suspend the TDR requirements under U.S.generally accepted accounting principles(“GAAP”)for certain loss mitigation activiti
318、es,including forbearance and loan modifications,related to the COVID-19 pandemic that occur between March 1,2020 through the earlier of December 31,2020 or 60 days after the date on which the COVID-19 outbreak national emergency terminates,as long as the loan was not more than 30 days delinquent as
319、of December 31,2019.The Consolidated Appropriations Act of 2021 extended the period of the TDR relief until the earlier of January 1,2022 or 60 days after the date on which the COVID-19 outbreak national emergency terminates.As described in“Note 1,Summary of Significant Accounting Policies,”we have
320、elected this option for temporary TDR relief for COVID-19-related loss mitigation activities.Economic StimulusThe Consolidated Appropriations Act of 2021 and the CARES Act also contain many provisions designed to mitigate the negative economic impact of the COVID-19 pandemic,including direct cash pa
321、yments to eligible taxpayers below specified income limits,expanded unemployment insurance benefits and eligibility,and relief designed to prevent layoffs and business closures at small businesses.While these provisions mostly expired by December 2020,the Consolidated Appropriations Act of 2021,whic
322、h was signed into law in December 2020,replaced many of these with similar provisions.The Consolidated Appropriations Act of 2021 also included$25 billion in rental assistance funds for eligible households living in single-family or multifamily properties.We believe these payments,expanded benefits,
323、and other relief have increased the ability of impacted borrowers to pay their mortgage loans and renters to pay their rent.State and Local Government Responses to COVID-19 In 2020,many states and localities issued executive orders or enacted legislation requiring mortgage forbearance,foreclosure an
324、d eviction moratoriums,and rent flexibilities.As the pandemic continues into 2021,some states have Business|Legislation and RegulationFannie Mae 2020 Form 10-K20taken action or are considering actions to extend foreclosure and eviction protections further into 2021.The terms of these new and propose
325、d requirements vary significantly in duration and scope.Actions taken by federal,state or local lawmakers to provide additional relief to borrowers and renters during the COVID-19 pandemic,depending on their scope and whether and to what extent they apply to our business,could have a material advers
326、e effect on our business and financial results.GSE Act and Other Legislative and Regulatory MattersAs a federally chartered corporation,we are subject to government regulation and oversight.FHFA,our primary regulator,regulates our safety and soundness and our mission.FHFA is an independent agency of
327、 the federal government with general supervisory and regulatory authority over Fannie 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 Treas
328、ury.We describe below regulations applicable to us pursuant to the GSE Act,other legislation and related regulatory matters.We also describe some regulations applicable to the mortgage industry and the securities markets that may indirectly affect us.CapitalThe GSE Act sets forth minimum and critica
329、l capital requirements for Fannie Mae and Freddie Mac and provides that the Director of FHFA shall establish risk-based capital requirements and may establish higher minimum capital requirements.FHFA has suspended the statutes capital classifications during conservatorship.Although existing statutor
330、y and regulatory capital requirements are not binding during conservatorship,we continue to submit capital reports to FHFA and FHFA monitors our capital levels.See“Note 12,Regulatory Capital Requirements”for information on the amount of regulatory capital we held as of December 31,2020.Conservatorsh
331、ip Capital Framework In 2017,FHFA directed Fannie Mae and Freddie Mac to implement an aligned risk measurement framework for evaluating business decisions and performance during conservatorship.The conservatorship capital framework includes specific requirements relating to risk on our book of busin
332、ess and modeled returns on our new acquisitions.We are required to submit quarterly reports to FHFA relating to the frameworks requirements.We discuss below our transition from the conservatorship capital framework to our new enterprise regulatory capital framework.Enterprise Regulatory Capital Fram
333、eworkIn November 2020,FHFA adopted a final rule establishing a new regulatory capital framework for the GSEs,which was published in the Federal Register on December 17,2020.The new regulatory capital framework implements the statutory capital requirements and establishes supplemental risk-based and leverage-based capital requirements beyond what is expressly required in the GSE Act.The framework p