Fannie Mae after Q3 2026: where $7.7B went, a $173B capital gap, and where appraisal risk sits

Fannie Mae reported its third quarter on Oct. 28, 2026.^1,2 Net income rose 5% from the second quarter and 8% from a year earlier. Net revenues rose 1% and 5%. Net worth reached $119.6B, up 13% in a year, because Fannie Mae pays no dividend while it is in conservatorship.

Two of the six tiles moved the other way. The credit loss provision more than doubled from the second quarter, and the share of single-family loans 90 days or more past due rose for the first time in three quarters. Available CET1 capital, the regulatory measure, is negative. For how the guaranty fee works and who takes a loss first, see how Fannie Mae and Freddie Mac make money.

Almost all of Fannie Mae’s money comes from the loans it guarantees. In the third quarter the single-family book produced $6.34B of net revenues and multifamily $1.32B. Gains on assets carried at fair value and on investments added $724M, a line that moves with interest rates and was a $23M loss in the second quarter.¹

On the way out, $1.14B went into the reserve for credit losses, $924M to Treasury, the affordable housing funds and FHFA, $784M to running the company, $371M to investors and insurers who take part of the credit risk, and $935M to income tax. The $4.18B left over stayed. Switch the chart to 2Q26 or 3Q25 to see how much smaller the reserve stream was.

The average single-family loan Fannie Mae bought in the third quarter was $339,254.² Its average fee on new loans was 53.8 basis points a year, and the 10 basis point TCCA fee that goes to Treasury sits on top.¹ Together that is about $2,164 a year on this loan, built into the borrower’s rate for as long as the loan is outstanding.

Fannie Mae puts the average saving from skipping an appraisal at $550, paid once at closing.³ That is about a quarter of one year’s fee on the same loan. The split below is our illustration: the TCCA fee goes to Treasury, and the rest is divided in the same proportions as the single-family segment’s third-quarter income statement. Fannie Mae does not report a per-loan breakdown.

The 10-Q explains that net worth and regulatory capital differ “primarily because the $120.8 billion stated value of the senior preferred stock does not qualify as regulatory capital.”² Treasury holds that stock under the 2008 rescue agreements. After it and other adjustments, Fannie Mae’s available common equity tier 1 capital was a deficit of $30B on Sept. 30.¹

Fannie Mae does not have to meet FHFA’s capital rule until conservatorship ends. Measured against it, Fannie Mae was $173B short of its CET1 requirement including buffers, and $205B short on adjusted total capital. The adjusted total capital gap shrank by $10B in the first nine months of 2026 as earnings were retained.² The slider below shows how long the CET1 gap takes to close at a given yearly pace if nothing else changes. The October 10 feature covers conservatorship and the offering question.

The provision for credit losses was $1.14B in the third quarter, up from $485M in the second. Fannie Mae ties the single-family part, $694M, to higher actual and projected interest rates, newly acquired loans and newly delinquent loans.¹ The multifamily part it ties in part to a lower property value forecast.

Of the single-family loans Fannie Mae bought in the quarter, 42% by balance had an original loan-to-value ratio above 80%, up from 40% a year earlier.² Its charter generally requires mortgage insurance or another credit enhancement on those loans. The share with credit scores under 620 also rose after Desktop Underwriter dropped its 620 minimum in November 2025.

Fannie Mae took back 3,749 foreclosed homes in the first nine months of 2026, 74% more than a year earlier, and the Southwest nearly doubled. It sold them for 107% of the loan balance before repair costs, down from 140%.² Serious delinquency is still low at 0.62%, and Fannie Mae describes it as near historic lows.

Every figure in chapter 05 that uses LTV starts with a property value. The 10-Q computes original LTV from “the appraised property value reported to us at the time of acquisition of the loan.”² For most loans that value comes from an appraisal. For loans that close under value acceptance, Fannie Mae’s name for an appraisal waiver, it is the lender’s estimate accepted by Desktop Underwriter. Since early 2025, purchase loans up to 90% LTV can qualify, up from 80%.¹²

In February 2026, 11.4% of Fannie Mae purchase loans and 47.4% of its no cash-out refinances closed without an appraisal, according to AEI Housing Center data published by the Appraisal Institute.⁹

The appraisal figure comes from the second quarter release, the title figure from conference remarks, and the third quarter release mentions neither.

For the title figure, HousingWire reported on Oct. 14 that Fannie Mae executives at the MBA convention cited about $25M of borrower savings over 18 months from title alternatives, or $500 to $1,500 a loan.¹¹ We found no Fannie Mae or FHFA document with that number. On Oct. 22, Executive Order 14438 directed FHFA to make the title acceptance pilot permanent, which we covered in our housing order analysis.