Fannie Mae’s Single-Family and Multifamily businesses acquire mortgage loans for inclusion in Mortgage-Backed Securities (MBS). Such MBS are secured by a beneficial ownership interest in either a single mortgage loan or a pool of mortgage loans secured by residential properties and are guaranteed as to timely payment of principal and interest by Fannie Mae. The certificates and payments of principal and interest on the certificates are not guaranteed by the U.S. Government and do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae. Thus, it is important that Fannie Mae uses prudent underwriting guidelines to evaluate the credit quality of the loans it guarantees to minimize losses to its investors.
Our Single-Family business provides liquidity to the mortgage market primarily by acquiring single-family loans from lenders and securitizing those loans into Fannie Mae MBS. Our Single-Family Business also supports liquidity in the mortgage market and the businesses of our lender customers through other activities, such as issuing structured Fannie Mae MBS backed by single-family mortgage assets and buying and selling single-family Agency MBS.
A single-family loan is secured by a property with four or fewer residential units. Our Single-Family Business securitizes and purchases primarily conventional (not federally insured or guaranteed) single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these types of loans. We also securitize or purchase loans insured by the Federal Housing Administration (FHA), loans guaranteed by the U.S. Department of Veterans Affairs (VA), loans guaranteed by the Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture and other mortgage-related securities.
Similarly, our Multifamily business provides liquidity to the commercial mortgage market by acquiring multifamily loans primarily from its national network of Delegated Underwriting and Servicing (DUS) lender partners. These loans are secured by several types of multifamily properties, including apartment buildings, manufactured housing communities, seniors housing, dedicated student housing, affordable housing, and cooperatives with five or more individual units. Fannie Mae securitizes those loans into Fannie Mae DUS MBS and enables the lenders to auction the securities to the market. In addition, Fannie Mae participates in the secondary market, buying and selling DUS MBS and enabling investors to create structured securities backed by DUS MBS.
While Standard & Poor’s, Fitch, and Moody’s have not rated any of the MBS issued directly by Fannie Mae, securities collateralized by Fannie Mae MBS and issued by other entities are rated consistently as “Triple A” (AAA), the highest quality. In addition, Fannie Mae MBS are assigned a 20% risk-based weighting under Basel accounting rules, which determine capital reserve requirements for banking entities. A 20% risk weighting places Fannie Mae MBS in an asset category generally considered to be of very high credit quality.
Why invest in Fannie Mae?
Fannie Mae MBS offers investors high-quality assets with attractive yields to fit various portfolio needs or investment strategies. Investors should exercise care to fully understand the value of any mortgage-backed investment and diligently review the applicable disclosure documents. Investors may want to work with their investment advisors to identify the potential risks versus reward of investing in MBS.
These securities may represent beneficial ownership interests in a pool of mortgage loans secured by single-family (1-4 units) residential properties.
Fannie Mae creates MBS that represent beneficial ownership interests in a pool of mortgage loans secured by multifamily (5 or more units) residential properties.
Structured Transactions and Supers
Fannie Mae Supers® (Supers) are single-class pass-through, 55-day TBA-eligible securities in which the underlying collateral are groups of existing UMBS and/or Supers. Megas® (Megas) are single-class pass-through, Non-TBA-eligible securities in which the underlying collateral consists of groups of existing Fannie Mae Non-TBA MBS and/or Fannie Mae Megas. A Real Estate Mortgage Investment Conduit (REMIC) is a type of multiclass mortgage-related security in which interest and principal payments from the mortgage-related assets serving as collateral are structured into separately traded securities called classes. Stripped mortgage-backed securities (SMBS) are multiclass, pass-through, grantor trust securities created by "stripping apart" the principal and interest payments from the underlying mortgage-related collateral into two or more classes of securities. In another type of SMBS transaction, excess servicing is stripped from base servicing on loans backing Fannie Mae MBS and issued solely as interest-only (IO) bond.
Overview of Tools
We provide the following disclosure tools for mortgage-backed securities issued by Fannie Mae:
- DUS Disclose® – For Multifamily securities, access disclosure data, including at-issuance and monthly data, Legal documents, consumable data files and search capabilities for MBS, Megas, and REMICs.
- PoolTalk® – For Single-Family securities, access disclosure data, including at-issuance and monthly data, Legal documents, consumable data files and search capabilities for UMBS, MBS, Supers/Megas, SMBS, and REMICs.
- Data Dynamics® allows users to interact with and analyze the following data: MBS property valuation method, Benchmark CPR®, Structured Transactions issuance, and forbearance and delinquency data.
Additional MBS Resources
- ARM MBS Subtypes provides ARM characteristics of each subtype we publish on our adjustable-rate securities.
- DUS Disclose Glossary provides definitions of the data elements disclosed for our Multifamily securities.
- Pool Prefix Glossary provides definitions of the prefixes we publish on our securities, including product and term.
- Single-Family MBS Disclosures Guide provides definitions and calculations for data elements disclosed for our Single-Family securities. This document also provides the disclosure file naming convention, publication timing, and file formats.
- Tax Factors
- Holiday Calendar and Disclosure Schedule (2023)