OTC:FNMA
FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE
A GSE giant that pools residential mortgages into securitized assets to ensure liquidity and stability in the U.S. housing finance system.
Key Metrics
Investment Thesis
Bull Case
FNMA offers exposure to the essential U.S. housing market with a stable revenue model backed by its government-sponsored status which insulates it from some commercial banking risks. The consistent revenue trend around $29B and healthy operating margins suggest resilience in generating cash flows even as interest rate environments fluctuate.
Bear Case
Investors face substantial risk from potential regulatory shifts that could fundamentally alter the GSE business model or reduce fee structures. The significant retained earnings deficit of -$24.26B indicates historical capitalization challenges, and heavy reliance on securitization creates sensitivity to housing market corrections.
About FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE
Fannie Mae (FNMA) is a government-sponsored enterprise that provides liquidity to the mortgage market by purchasing mortgages from lenders and selling them as mortgage-backed securities. Operating primarily in the US residential real estate market, the company facilitates affordable home financing through its securitization programs and guarantees mortgage-backed bonds.
Analysis
Management Discussion
The company reported revenue of $28.96B with net profit of $14.36B, reflecting strong operational performance despite a slight decline from the 2024 peak. Cash flow from operations remained robust at $23.99B, while significant cash outflows in financing ($-206.85B) were largely offset by investing inflows and share issuances to maintain liquidity buffers.
Industry Overview
The mortgage-backed securities industry serves as the backbone of residential real estate financing, connecting homebuyers with institutional investors through securitization channels. This sector is highly sensitive to interest rate cycles and housing inventory levels, requiring strict regulatory oversight to maintain systemic financial stability.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $29.73B | $29.05B | $29.07B | $28.96B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $29.73B | $29.05B | $29.07B | $28.96B |
| Operating Expenses | $13.50B | $7.09B | $7.80B | $10.98B |
| Operating Income | $16.23B | $21.96B | $21.27B | $17.98B |
| G&A | $3.33B | $3.60B | $3.62B | $3.58B |
| Other OpEx | $10.17B | $3.49B | $4.18B | $7.40B |
| Non-Operating Income | $0 | $0 | $0 | $0 |
| Interest Expense | $90.87B | $110.94B | — | — |
| Pre-Tax Income | $16.23B | $21.96B | $21.27B | $17.98B |
| Income Tax | $3.31B | $4.55B | $4.29B | $3.62B |
| Continuing Ops | $12.92B | $17.41B | $16.98B | $14.36B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $12.92B | $17.41B | $16.98B | $14.36B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $12.92B | $17.41B | $16.98B | $14.36B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $57.99B | $35.82B | $38.85B | — |
| Total Assets | $4.31T | $4.33T | $4.35T | $4.32T |
| Total Liabilities | $4.25T | $4.25T | $4.26T | $4.21T |
| Shareholders' Equity | $60.28B | $77.68B | $94.66B | $109.01B |
| Retained Earnings | $-73.01B | $-55.60B | $-38.62B | $-24.26B |
| AOCI | $35.0M | $32.0M | $29.0M | $20.0M |
| Treasury Stock | $7.40B | $7.40B | $7.40B | $7.40B |
| Total L&E | $4.31T | $4.33T | $4.35T | $4.32T |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $12.92B | $17.41B | $16.98B | $14.36B |
| Non-Cash Adjustments | $64.06B | $-8.73B | $-54.43B | $19.19B |
| Working Capital Changes | $-33.16B | $3.20B | $26.93B | $-9.57B |
| Cash from Operations | $43.83B | $11.88B | $-10.52B | $23.99B |
| Cash from Investing | $90.13B | $99.15B | $157.79B | $186.90B |
| Cash from Financing | $-154.74B | $-130.17B | $-137.17B | $-206.85B |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-20.79B | $-19.14B | $10.11B | $4.05B |
| Beginning Cash | $108.63B | $87.84B | $68.71B | $38.54B |
| Ending Cash | $87.84B | $68.71B | $78.81B | $42.58B |
Frequently Asked Questions
How does FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE make money?
Mortgage-Backed Securities (MBS) issuance, Government-Sponsored Enterprise (GSE) guarantee fees, and other financing activities including commercial mortgage-backed securities and credit card processing services for lenders.
What are the main risks for FNMA?
Regulatory changes regarding GSE reform or dissolution, rising interest rates that increase funding costs for long-duration assets, potential increases in credit losses on mortgage pools due to economic downturns, and concentration risk within the U.S. residential real estate sector.
What is FNMA's competitive advantage?
Implicit government support that lowers funding costs compared to private competitors, a dominant market share in the secondary mortgage market providing unparalleled liquidity, and extensive regulatory expertise allowing navigation of complex housing finance laws.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.