Fannie Mae 2008 Annual Report Download - page 320

In both 2008 and 2007, we sold for cash two portfolios of investments in LIHTC partnerships reflecting
approximately $858 million and $930 million, respectively, in future tax credits and the release of future
capital obligations relating to these investments.
We also have invested in other limited partnerships designed to acquire, develop, rehabilitate or lease single-
family housing, which includes townhomes and condominiums, and multifamily real estate. We have invested
in these partnerships in order to increase the supply of affordable housing in the United States and to serve
communities in need. These investments generate revenue and losses from operations and the eventual sale of
the assets.
In 2008 and 2007, we recorded $795 million and $174 million, respectively, of impairment related to all our
limited partnerships in “Losses from partnership investments” in our consolidated statements of operations.
We have three investments in limited partnerships relating to alternative energy sources. The purpose of these
investments was to facilitate the development of alternative domestic energy sources and to achieve a
satisfactory return on capital via a reduction in our federal income tax liability as a result of the use of the tax
credits for which the partnerships qualify, as well as the deductibility of the partnerships’ net operating losses.
The three investments ceased operations on December 31, 2007 and have no carrying value as of
December 31, 2008.
Other VIEs
The management and marketing of our foreclosed multifamily properties is performed by an independent third
party. To facilitate this arrangement, we transfer foreclosed properties to a VIE established by the counterparty
responsible for managing and marketing the properties. We are the primary beneficiary of the entity. However,
the only assets of the VIE are those foreclosed properties transferred by us. Because our transfer of the
foreclosed properties does not qualify as a sale, the foreclosed properties are recorded in “Acquired property,
net” in our consolidated balance sheets.
Consolidated VIEs
We consolidate in our financial statements Fannie Mae MBS trusts when we own 100% of the trust, which
gives us the unilateral ability to liquidate the trust. We also consolidate MBS trusts that are within the scope
of FIN 46R when we are deemed to be the primary beneficiary. This includes certain private-label, mortgage
revenue bond, and Fannie Mae securitization trusts that meet the VIE criteria. As an active participant in the
secondary mortgage market, our ownership percentage in any given mortgage-related security will vary over
time. Third-party ownership in these consolidated MBS trusts is recorded as a component of “Long-term debt”
in our consolidated balance sheets. We also consolidate in our financial statements the assets and liabilities of
limited partnerships that are VIEs if we are deemed to be the primary beneficiary. Third-party ownership in
these consolidated limited partnerships is recorded in “Minority interests in consolidated subsidiaries” in our
consolidated balance sheets. In general, the investors in the obligations of consolidated VIEs have recourse
only to the assets of those VIEs and do not have recourse to us, except where we provide a guaranty to the
VIE.
F-42
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)