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Fannie Mae reports net income of $16B in 2018

Brings $446.6 billion to the single-family housing market

Fannie Mae reported Thursday it posted a comprehensive income of $3.2 billion in the fourth quarter of 2018, bringing full-year earnings to $15.6 billion in 2018.

Although the fourth quarter's income is down from the third quarter's $4 billion, its much higher than the fourth quarter of 2017, when it saw a comprehensive income of $2.3 billion.

The company’s net income came in at $3.2 billion for the quarter, down from $4 billion in the third quarter this year. But higher than 2017’s $2.5 billion.

The main driver of the increase in net income was the absence of a $9.9 billion one-time charge for federal income taxes recorded in 2017 and the lower corporate tax rate in effect as a result of the Tax Cuts and Jobs Act of 2017.

The company also stated its pre-tax income in 2018 was $20.1 billion, up from $18.4 in the fourth quarter of 2017.

Fannie Mae announced it provided $122.5 billion in liquidity to the mortgage market in the fourth quarter, bringing its yearly total to $512 billion in 2018.

All in all, through its purchases and guarantees of mortgage loans, Fannie Mae acquired approximately 1.9 million mortgage loans that comprised 1.2 million home purchases and 713,000 refinancings in 2018.

A total of $446.6 billion in liquidity was awarded to the single-family mortgage market, which is an estimated market share of 37% for the fourth quarter of 2018, pushing its total to 39% for the full year.

Notably, the single-family serious delinquency rate fell from 0.82% as of September, to 0.76%, driven primarily from improved loan payment performance and nonperforming loan sales.

The company also financed and 777,000 multifamily units in 2018, including 229,000 in the fourth quarter. Throughout the year, Fannie Mae provided $65.4 billion in multifamily financing.

Multifamily net income came in at $580 million in Q4 of 2018, increasing from $549 million in Q3 of 2018. The increase in net income in Q4 was driven partially by an increase in guaranty fee revenue as the multifamily book grew during the quarter.

The GSE will now pay out $3.2 billion to the U.S. Treasury if the Federal Housing Finance Agency agrees to a dividend in this amount. In November, Fannie Mae paid out $4 billion to the Treasury.

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