Fannie Mae 2010 Annual Report Download - page 119

(6)
Calculated based on Multifamily segment guaranty fee income divided by the average multifamily guaranty book of
business, expressed in basis points.
(7)
Calculated based on credit losses divided by the average multifamily guaranty book of business, expressed in basis
points.
(8)
Consists of multifamily mortgage loans held in our mortgage portfolio, multifamily mortgage loans held by
consolidated trusts, multifamily Fannie Mae MBS issued from unconsolidated trusts held by either third parties or
within our retained portfolio, and other credit enhancements that we provide on multifamily mortgage assets. Excludes
non-Fannie Mae mortgage-related securities held in our investment portfolio for which we do not provide a guaranty.
(9)
Reflects unpaid principal balance of Fannie Mae MBS issued (excluding portfolio securitizations) and loans purchased
during the period. Includes $1.0 billion and $391 million from the HFA new issue bond program for the years ended
December 31, 2010 and December 31, 2009, respectively.
(10)
Excludes HFA new issue bond program.
(11)
Reflects unpaid principal balance of Fannie Mae MBS issued during the period. Includes: (a) issuances of new MBS
volumes, (b) $8.7 billion of Fannie Mae portfolio securitization transactions for the year ended December 31, 2010
and (c) $389 million of conversion of adjustable rate loans to fixed rate loans and DMBS securities to MBS securities
for the year ended December 31, 2010.
(12)
Reflects original face value of out-of-portfolio structured securities issuances by our Capital Markets Group.
(13)
Interest expense estimate based on allocated duration matched funding costs. Net interest income was reduced by
guaranty fees allocated to Multifamily from the Capital Markets Group on multifamily loans in Fannie Mae’s
portfolio.
(14)
Based on unpaid principal balance.
(15)
Includes mortgage loans and Fannie Mae MBS issued and guaranteed by the Multifamily segment. Information for
2010 is through September 30, 2010 and has been obtained from the Federal Reserve’s September 2010 mortgage
debt outstanding release, the latest date for which the Federal Reserve has estimated mortgage debt outstanding for
multifamily residences.
(16)
Includes $19.9 billion of Fannie Mae multifamily MBS held in the mortgage portfolio, the vast majority of which
have been consolidated to loans in our consolidated balance sheet, and $1.4 billion of bonds issued by HFAs as of
December 31, 2010.
2010 compared with 2009
Key factors affecting the results of our Multifamily business for 2010 compared with 2009 included the
following:
Guaranty Fee Income
Multifamily guaranty fee income increased in 2010 compared with 2009 primarily due to higher fees charged
on new acquisitions in recent years. New acquisitions with higher guaranty fees have become an increasingly
large part of our book of business.
Losses from Partnership Investments
In 2009, we reduced the carrying value of our LIHTC investments to zero. As a result, we no longer recognize
net operating losses or other-than-temporary impairment on our LIHTC investments, which resulted in a
decrease in losses from partnership investments in 2010 compared with 2009.
Credit-Related Expenses
Multifamily credit-related expenses decreased in 2010 compared with 2009 primarily due to a modest decrease
in the allowance for loan losses in 2010, as multifamily credit trends stabilized, compared with the increase in
the allowance for 2009. The provision for credit losses for 2010 was $156 million compared with $2.2 billion
for 2009.
Although our allowance and provision for multifamily credit losses decreased, our multifamily charge-offs and
foreclosed property expense remained elevated. Our multifamily net charge-offs and foreclosed property
expense increased from $220 million in 2009 to $498 million in 2010. The increase in net charge-offs and
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