Fannie Mae set aside $1.1 billion for credit losses in the third quarter, more than double the $485 million it reserved in the second, citing higher actual and projected interest rates, newly delinquent loans and weakening credit on apartment loans. The mortgage giant still earned $4.2 billion, up from $4.0 billion in the prior quarter, according to its third-quarter release issued Oct. 28.
The split between the two halves of the business is the main story in the numbers. Single-family net income rose 14% from the second quarter to $3.64 billion. Multifamily net income fell 32% to $535 million, and Fannie attributed its larger apartment-loan provision to “weakening credit metrics on multifamily loans, a decline in our near-term property value forecast, and elevated interest rates.”
Multifamily: a 72% jump in the provision
Fannie’s multifamily credit provision rose to $446 million from $259 million in the second quarter and $69 million a year earlier. The multifamily serious delinquency rate, which counts loans 60 or more days past due by unpaid balance, edged up to 0.62% from 0.60%.
The book itself is still growing, and its leverage measures were steady. Multifamily acquisitions rose to $14.5 billion from $14.2 billion, the guaranty book grew by $800 million to $545.4 billion, and the weighted-average original loan-to-value ratio and debt service coverage ratio held at 63% and 1.9. Multifamily net revenues rose to $1.32 billion.
Fannie’s language about a lower near-term property value forecast lines up with what apartment owners have been saying. In the National Multifamily Housing Council’s October survey, 17% of executives facing maturing loans said foreclosures were possible.
Single-family: higher rates, fewer loans, more delinquencies
On the single-family side, the provision rose to $694 million from $226 million, which Fannie attributed primarily to “higher actual and projected interest rates, newly acquired loans, and newly delinquent loans.” The single-family serious delinquency rate, covering loans 90 or more days past due or in foreclosure, rose to 0.62% from 0.58% at the end of June.
That is a low rate by historical standards, but the direction matches broader data: ICE’s September first look showed the national delinquency rate rising to 3.66% with active foreclosures at their highest level since 2019.
Volume shrank. Single-family conventional acquisitions fell to $88.3 billion from $111.2 billion in the second quarter. In all, Fannie said it provided $103 billion of liquidity in the quarter, supporting about 194,000 home purchases, 66,000 refinancings and 96,000 rental units. Nearly 103,000 first-time buyers, 53% of single-family purchase acquisitions, financed through Fannie, and 47% of single-family acquisitions went to borrowers earning no more than the area median income.
The credit profile of the existing book was little changed: a weighted-average mark-to-market loan-to-value ratio of 51% and an average FICO score at origination of 753. The average guaranty fee on newly acquired conventional loans, net of the fees passed to Treasury, rose to 53.8 basis points from 53.5.
Earnings held up on fair value gains
Net revenues, mostly guaranty fees on Fannie’s $4.1 trillion book, rose to $7.7 billion from $7.6 billion. Fannie said the rise in net income reflected those higher revenues and a shift from fair value losses to gains, partly offset by the larger provision: other gains totaled $724 million, driven primarily by net fair value gains, compared with a $23 million loss in the second quarter. Other comprehensive losses grew by $885 million on unrealized losses on available-for-sale securities, so total comprehensive income fell 18% to $3.1 billion.
Net worth reached $119.6 billion, up 3% from the second quarter and 13% from a year earlier. The company’s actual available common equity tier 1 capital was still a deficit of $30 billion as of Sept. 30, according to a footnote to the release; the regulatory capital framework that sets those requirements is not currently in effect while Fannie remains in conservatorship.
“Fannie Mae landed another strong performance this quarter, growing our net worth 13% year over year to $120 billion,” said William J. Pulte, director of U.S. Federal Housing and chairman of Fannie’s board. Acting chief executive Peter Akwaboah said that so far in 2026 the company has “provided $344 billion of liquidity, helping more than 295,000 first-time homeowners achieve the American Dream.”
Jake Williamson, head of single-family, pointed to “credit score modernization” as one of the practical innovations the company is pairing with risk management. Fannie listed its VantageScore 4.0 expansion among the quarter’s highlights; Pulte has opened VantageScore 4.0 to all Fannie and Freddie lenders.
Fannie filed its third-quarter Form 10-Q with the Securities and Exchange Commission the same day. More lending coverage is in our Mortgage section.
