Fannie Mae, the largest issuer of single-family mortgage bonds, said its net income fell 26% in the second quarter from a year ago as lending for home purchases slowed in the early months of the pandemic.

Net income for the three months ended June 30 fell to $2.55 billion from $3.43 billion a year earlier, Fannie Mae said on Thursday. The mortgage financier said it increased the funds it set aside as a buffer against credit losses that could be caused by the pandemic.

“Fannie Mae expects the impact of the COVID-19 pandemic to continue to negatively affect its financial results, contributing to lower net income in 2020 than in 2019,” the company said in a statement.

Income from fees it charges for activities such as securitizing home loans into bonds fell to $90 million from $113 million a year earlier, Fannie Mae said in a regulatory filing.

Freddie Mac, its smaller rival, reported net income of $1.78 billion, up 18% from $1.51 billion a year earlier as fee income from its multifamily business grew to $469 million from $280 million, the company said on Thursday.

Fannie Mae said 5.7% of the single-family loans it guarantees were in forbearance as of June 30, down from the 7% it reported in May when it released first-quarter earnings.

Freddie Mac said 3.8% of the single-family loans it backs were in forbearance at the end of the quarter. The company didn’t report the rate for the first quarter.

During the second quarter, both companies hired underwriting advisers to guide their steps toward existing conservatorship. Fannie Mae said it has chosen Morgan Stanley while Freddie Mac said it will use J.P. Morgan.

Together, the two mortgage companies guarantee more than half of the $11 trillion outstanding U.S. home loans.