GSEs Report Strong 2024 Financial Results
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae and Freddie Mac reported strong financial results for 2024, in what could be the last annual report for the enterprises under government conservatorship.
Fannie Mae booked net income of just under $17 billion for the full year, about 2 percent below what it reported in 2023. In its statement, Fannie said last year’s performance was driven by guaranty fee income on its $4 trillion guaranty book of business, “consistent with the transformation of our business model that began well over a decade ago.”
Fannie said it provided $381 billion in liquidity in 2024, which enabled the financing of approximately 1.4 million home purchases, refinancings, and rental units. It acquired approximately 778,000 single-family purchase loans, of which approximately half were for first-time homebuyers, and approximately 204,000 single-family refinance loans. The enterprise also financed roughly 420,000 units of multifamily rental housing in 2024.
The enterprise’s single-family conventional acquisition volume was $326 billion in 2024, compared with $316 billion in 2023. Purchase acquisition volume, of which approximately half was for first-time homebuyers, decreased slightly to $269.9 billion in 2024. Refinance volume jumped about 30 percent to $56.1 billion in 2024.
New multifamily business volume was $55.1 billion in 2024, compared with $52.9 billion in 2023. The increased volume was largely attributed to increased market activity in the fourth quarter.
Fannie’s fourth-quarter enterprise-wide net income was $4.1 billion. The enterprise has recorded consistent net income over the last five quarters, ranging from $3.9 billion to $4.5 billion. The company has nearly quadrupled its net worth in the last five years, from $25 billion in 2020 to just under $95 billion at the end of 2024.
Freddie Mac also had a profitable 2024. The enterprise grew its annual net income by 13 percent year-over-year to just under $12 billion for full-year 2024. Its net worth stood at just below $60 billion at the conclusion of last year.
Freddie said it delivered $411 billion of liquidity into the U.S. housing finance system, helping 1.6 million households buy, refinance or rent a home last year.
The enterprise financed 1 million mortgages, with 53 percent of eligible loans affordable to low- to moderate-income families. First-time homebuyers represented 52 percent of new single-family purchase loans. Freddie also financed 553,000 rental units, with 93 percent being affordable to low- and moderate-income families.
Freddie’s single-family acquisition volume was $345 billion for the full year. The multi-family segment accounted for $65 billion in activity.
Freddie’s fourth-quarter earnings were $3.2 billion, up 11 percent from the fourth quarter of 2023.
Discussion of ending the conservatorships has accelerated since the election of President Donald Trump to a second term.
President Trump expressed the goal of ending the arrangement during his first term, but progress toward that end never took off. Since Election Day in November, it has.
In December, the Congressional Budget Office (CBO) released a report showing Fannie Mae and Freddie Mac are in better financial position to repay the U.S. Treasury for its stake in the enterprises than they were four years ago.
Last month, the U.S. Treasury Department and the Federal Housing Finance Agency (FHFA) amended the Preferred Stock Purchase Agreements (PSPAs) between Treasury and the two GSEs. The new agreement was put in place “to help ensure that the eventual release of the GSEs from conservatorship will be orderly.”
Fannie and Freddie have been under the conservatorship of the FHFA, which also regulates the entities, since the financial crisis of 2008. For a decade, the entities paid nearly all of their earnings to Treasury, which owns the dominant stakes in the two GSEs.
In late 2019, after several years of profitability, Treasury allowed the GSEs to retain more of their earnings to rebuild their capital reserves. This was considered a vital step for Fannie and Freddie to raise the necessary capital to once again become fully private enterprises.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
