Fannie Mae did something in 2018 its counterpart Freddie Mac couldn’t do: grow profits on its multifamily portfolio. Both government-sponsored enterprises grew their portfolios, but only Fannie Mae saw corresponding net income growth.
According to a HousingWire report, Fannie Mae saw its net income from multifamily rise from $951 million in 2017 to $2.21 billion in 2018, an increase of approximately $1.3 billion. Freddie Mac saw its net income from multifamily fall by $700 million due to “spread widening during 2018 which resulted in fair value losses on mortgage loans and commitments and mortgage-related securities.”
The reason for Fannie Mae’s increase? The article said it was the impact of the Tax Cuts and Jobs Act of 2017, which led the GSE needing a draw last year from the Department of the Treasury of $3.7 billion. That was the first time the GSE needed money from the government since 2012.
Fannie Mae may have made more money in 2018 and its multifamily portfolio may be more extensive than Freddie Mac’s, but Freddie Mac has its counterpart beat when it comes to financing units last year. According to Freddie Mac, it financed 866,000 units last year, while Fannie Mae supported 777,000 units of multifamily housing in 2018.