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Fannie Mae multifamily posts solid Q2

Originations are up and delinquencies are low, but there is one bad mark on the scorecard

Fannie Mae’s multifamily business posted a solid second quarter.

Originations are up almost 10% year-over-year, with Q2 2018 coming in at $14.5 billion, $1.3 billion more than Q2 2017’s $13.2 billion in originations.  

The quarter-over-quarter gain is even better, as Fannie put up $3.2 billion more in originations in Q2 than it did in Q1.

The overall multifamily portfolio continues to grow, increasing $6.3 billion in unpaid balance in Q2.

The one dark spot in Fannie’s Q2 performance was its tumble in net income. Fannie Mae was able to pull in $504 million in net income this quarter, but that is not close to last quarter, when it netted $580 million. The drop represents a 13% decrease in net income QoQ.  Fannie's net income was down YoY as well. Net income fell $34 million or 6% YoY from its Q2 2017 total of $538 million.

Fannie chalks the losses in net income up to a shift to fair value losses in Q2 from fair value gains in Q1. The fair value losses were largely due to losses on commitments as a result of increasing interest rates during the commitment periods.

Delinquencies remain functionally non-existent for Fannie Mae, and the serious delinquency rate decreased from 0.11% at the end of Q4 2017 to 0.10% at the end of this quarter.

Outgoing President and CEO of Fannie Mae Timothy Mayopoulos expressed confidence in Fannie’s Q2 performance.

“Our strong quarterly results reflect solid fundamentals in our single-Family and multifamily businesses,” he said in a statement. “Both segments are managing and distributing risk in sustainable, efficient, and innovative ways, and our guaranty book remains robust and stable.”

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