Fannie Mae

The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise. It has been a publicly traded company since 1968. Founded in 1938 during the Great Depression as part of the New Deal, Fannie Mae was created to help more people get home loans.

Fannie Mae works by turning home loans into special financial products called mortgage-backed securities. This helps banks and lenders give out more loans because they can get money faster. This way, more people can buy homes.

As of 2025, Fannie Mae held over $4.3 trillion in assets, making it the largest company in the United States. It was also the fifth largest company in the world by that measure. In the 2025 Fortune Global 500 list, it ranked 50th globally by total revenue.

History

Background and early decades

Historically, most housing loans in the early 1900s in the United States were short term mortgage loans with balloon payments. The Great Depression weakened the U.S. housing market, as people lost their jobs and were unable to make payments. By 1933, an estimated 20 to 25% of the nation’s outstanding mortgage debt was in default. This resulted in foreclosures in which nearly 25% of America’s homeowners lost their homes to banks. To address this, Fannie Mae was established by the U.S. Congress in 1938 by amendments to the National Housing Act as part of Franklin Delano Roosevelt’s New Deal. Originally chartered as the National Mortgage Association of Washington, the organization’s explicit purpose was to provide local banks with federal money to finance home loans in an attempt to raise levels of home ownership and the availability of affordable housing. Fannie Mae created a liquid secondary mortgage market and thereby made it possible for banks and other loan originators to issue more housing loans, primarily by buying Federal Housing Administration insured mortgages. For the first thirty years following its inception, Fannie Mae held a monopoly over the secondary mortgage market.

Fannie Mae was acquired by the Housing and Home Finance Agency from the Federal Loan Agency as a constituent unit in 1950. In 1954, an amendment known as the Federal National Mortgage Association Charter Act made Fannie Mae into “mixed-ownership corporation”, meaning that federal government held the preferred stock while private investors held the common stock; in 1968 it converted to a privately held corporation, to remove its activity and debt from the federal budget. In the 1968 change, arising from the Housing and Urban Development Act of 1968, Fannie Mae’s predecessor (also called Fannie Mae) was split into the current Fannie Mae and the Government National Mortgage Association (“Ginnie Mae”).

Ginnie Mae, which remained a government organization, guarantees FHA-insured mortgage loans as well as Veterans Administration (VA) and Farmers Home Administration (FmHA) insured mortgages. As such, Ginnie Mae is the only home-loan agency explicitly backed by the full faith and credit of the United States government.

In 1970, the federal government authorized Fannie Mae to purchase conventional loans, i.e. those not insured by the FHA, VA, or FmHA, and created the Federal Home Loan Mortgage Corporation (FHLMC), colloquially known as Freddie Mac, to compete with Fannie Mae and thus facilitate a more robust and efficient secondary mortgage market. That same year FNMA went public on New York and Pacific Exchanges.

In 1981, Fannie Mae issued its first mortgage pass-through and called it a mortgage-backed security. Ginnie Mae had guaranteed the first mortgage pass-through security of an approved lender in 1968 and in 1971 Freddie Mac issued its first mortgage pass-through, called a participation certificate, composed primarily of private mortgage loans.

1990s

In 1992, President George H. W. Bush signed the Housing and Community Development Act of 1992. The Act amended the charter of Fannie Mae and Freddie Mac to reflect the Democratic Congress’ view that the GSEs “have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return”. For the first time, the GSEs were required to meet “affordable housing goals” set annually by the Department of Housing and Urban Development (HUD) and approved by Congress. The initial annual goal for low-income and moderate-income mortgage purchases for each GSE was 30% of the total number of dwelling units financed by mortgage purchases and increased to 55% by 2007.

In 1999, Fannie Mae came under pressure from the Clinton administration to expand mortgage loans to low and moderate income borrowers by increasing the ratios of their loan portfolios in distressed inner city areas designated in the Community Reinvestment Act (CRA) of 1977.

2000s

In 2000, because of a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. In 2004, these rules were dropped and high-risk loans were again counted toward affordable housing goals.

The intent was that Fannie Mae’s enforcement of the underwriting standards they maintained for standard conforming mortgages would also provide safe and stable means of lending to buyers who did not have prime credit.

On January 26, 2005, the Federal Housing Enterprise Regulatory Reform Act of 2005 (S.190) was first introduced by U.S. Senator Chuck Hagel. The Senate legislation was an effort to reform the existing GSE regulatory structure in light of the recent accounting problems and questionable management actions leading to considerable income restatements by the GSEs. After being reported favorably by the Senate’s Committee on Banking, Housing, and Urban Affairs in July 2005, the bill was never considered by the full Senate for a vote. Sen. John McCain’s decision to become a cosponsor of S.190 almost a year later in 2006 was the last action taken regarding Sen. Hagel’s bill in spite of developments since clearing the Senate Committee.

The mortgage crisis from late 2007

Following their mission to meet federal Housing and Urban Development (HUD) housing goals, GSEs such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks) had striven to improve home ownership of low and middle income families and underserved areas generally through special affordable methods such as “the ability to obtain a 30-year fixed-rate mortgage with a low down payment … and the continuous availability of mortgage credit under a wide range of economic conditions”. Then in 2003–2004, the subprime mortgage crisis began. The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization (PLS) conduits, typically operated by investment banks.

As loan originators began to distribute more and more of their loans through private label PLS’s, the GSEs lost the ability to monitor and control loan originators. Competition between the GSEs and private securitizers for loans further undermined GSEs’ power and strengthened mortgage originators. This contributed to a decline in underwriting standards and was a major cause of the 2008 financial crisis.

The growth of private-label securitization and lack of regulation in this part of the market resulted in the oversupply of underpriced housing finance. That led, in 2006, to an increasing number of borrowers, often with poor credit, who were unable to pay their mortgages – particularly with adjustable rate mortgage loans (ARM), causing a precipitous increase in home foreclosures. As a result, home prices declined as increasing foreclosures added to the already large inventory of homes and stricter lending standards made it more difficult for borrowers to get loans.

2008 – crisis and conservatorship

On July 11, 2008, The New York Times reported that U.S. government officials were considering a plan for the U.S. government to take over Fannie Mae and/or Freddie Mac should their financial situations worsen due to the U.S. housing crisis. Fannie Mae and smaller Freddie Mac owned or guaranteed a massive proportion of all home loans in the United States and so were especially hard hit by the slump.

On September 7, 2008, James Lockhart, director of the Federal Housing Finance Agency (FHFA), announced that Fannie Mae and Freddie Mac were being placed into conservatorship of the FHFA. The action was “one of the most sweeping government interventions in private financial markets in decades”. Lockhart also dismissed the firms’ chief executive officers and boards of directors, and caused the issuance to the Treasury new senior preferred stock and common stock warrants amounting to 79.9% of each GSE. The value of the common stock and preferred stock to pre-conservatorship holders was greatly diminished by the suspension of future dividends on previously outstanding stock, in the effort to maintain the value of company debt and of mortgage-backed securities.

2010 – delisting

On June 16, 2010, Fannie Mae and Freddie Mac announced their stocks would be delisted from the NYSE. The Federal Housing Finance Agency directed the delisting after Fannie’s stock traded below $1 a share for over 30 days. Since then the stocks have continued to trade on the Over-the-Counter Bulletin Board.

Dividends paid to government

In May 2013, Fannie Mae announced that it is going to pay a dividend of $59.4 billion to the United States Treasury.

In 2014, gross flows were:

• $116 billion received from Treasury
• $134 billion paid to Treasury

Fannie Mae’s 2014 financial results enabled it to pay $20.6 billion in dividends to Treasury for the year, resulting in a cumulative total of $134.5 billion in dividends through December 31, 2014 – approximately $18 billion more than Fannie Mae received in support.

2015 ruling – present

On May 11, 2015 The Wall Street Journal reported that A U.S. District Court judge said Nomura Holdings Inc. was not truthful in describing mortgage-backed securities sold to Fannie Mae and Freddie Mac, giving a victory to the companies’ conservator, the Federal Housing Finance Agency (FHFA). In her decision, Judge Denise Cote wrote that Nomura, in offering documents for mortgage-backed securities sold to Fannie and Freddie, didn’t accurately describe the loans’ quality. “The magnitude of falsity, conservatively measured, is enormous”, she wrote. During the boom, Fannie and Freddie invested billions of dollars in mortgage-backed securities issued by such companies as Nomura. Those investments bolstered profits but, in the bust, contributed to steep losses that ultimately resulted in the companies’ 2008 government takeover. Nomura and RBS were two of 18 financial institutions, including Bank of America Corp. and Goldman Sachs Group Inc., targeted in 2011 by the FHFA, which alleged that the companies lied about the quality of the loans underlying the securities.

Business

Fannie Mae helps the housing market by buying loans from banks and turning them into special securities that can be sold to investors. This gives banks more money to lend to new buyers. Fannie Mae makes money by borrowing at low rates and using that money to buy these loans.

Fannie Mae also earns money by charging a small fee for promising to pay the loan if the borrower cannot. This makes investors feel safe when they buy these securities. Because of rules set by the government, Fannie Mae can only buy loans that meet certain standards, called "conforming loans." These loans have limits on how big they can be, which helps keep the housing market stable.

Controversies

Accounting controversy

In 2004, Fannie Mae faced questions about how it handled its financial records. Officials found mistakes in the way the company reported its earnings. This led to big costs for fixing the problems and changes in how the company operated.

Conflict of interest

In 2008, reports showed that some leaders of Fannie Mae received special deals on loans from a company whose mortgages Fannie Mae bought. This raised concerns about fairness and influence in business decisions.

2011 SEC charges

In 2011, leaders of Fannie Mae and another company, Freddie Mac, faced charges for not giving clear information about risky loans. The leaders settled these cases without admitting they did anything wrong.

2011 lawsuits

In 2011, Fannie Mae and Freddie Mac faced lawsuits from big banks for selling misleading information about certain loans. These lawsuits led to large settlements, but questions remained about whether individual bank leaders would face consequences.

2013 allegations of kickbacks

In 2013, a former worker at Fannie Mae was accused of taking illegal payments from a real estate broker. Another employee claimed she was fired for reporting similar concerns years earlier.

Leadership

Chief executive officer

Fannie Mae has had several leaders over the years. Here are some of the recent and current CEOs:

• Peter Akwaboah (Oct. 2025–present) *acting CEO
• Priscilla Almodovar (Dec. 5, 2022–Oct. 22, 2025)
• Hugh R. Frater (2018–2022)
• Timothy Mayopoulos (2012–2018)
• Michael Williams (2009–2012)
• Herbert M. Allison (2008–2009)
• Daniel Mudd (2005–2008)
• Franklin Raines (1999–2004)
• James A. Johnson (1991–1998)
• David O. Maxwell (1981‑1991)
• Allan O. Hunter (1970–1981)

Key people

The current Board of Directors as of Nov. 2025 includes:

• William J. Pulte, Chair
• Michael Stucky, Vice Chair
• Barry Habib
• Brandon Hamara
• Clinton Jones
• Omeed Malik
• Manuel “Manolo” Sánchez Rodríguez
• Scott D. Stowell

The board also included these members in 2018:

• Renee Lewis Glover, independent director since January 2016
• Michael J. Heid, independent director since May 2016
• Robert H. Herz, independent director since June 2011
• Antony Jenkins, independent director since July 2018
• Diane C. Nordin, independent director since November 2013
• Jonathan Plutzik, board chair since December 2018, independent director since November 2009
• Manuel "Manolo" Sánchez Rodríguez, independent director since September 2018
• Ryan A. Zanin, independent director since September 2016

In 2018, there were also seven executive officers, including presidents and vice presidents with different roles.

Related legislation

In 2013, a representative named Scott Garrett introduced a bill called the Budget and Accounting Transparency Act of 2014. This bill aimed to change how certain government programs, like Fannie Mae and Freddie Mac, are handled in the federal budget. The idea was to include the costs of these programs directly in the national debt calculations.

The House of Representatives approved the bill in April 2014, but it was sent to the Senate and no more actions were taken. Because the Senate did not pass the bill, it did not become a law, and the way these programs are accounted for in the budget stayed the same.