Fannie Mae

Critical role in the implementation of U.S. government housing policy Integral link to the U.S. government Continuing financial support from the U.S. Treasury Dominant market position as a secondary-market liquidity provider to the U.S. residential mortgage market Significant improvements in risk management since the financial crisis Structural inability to add to its extremely slim reported equity once it reaches $25 billion (albeit up from $3 billion) Monoline exposure to the U.S. mortgage market Delinquencies will likely rise as a result of the economic fallout from COVID-19 and test the effectiveness of credit enhancements and private investors' risk appetite Substantial uncertainties regarding impact of potential legislative changes The stable outlooks on our ratings on Fannie Mae's debt issues reflect the stable

...Strengths: Weaknesses: + Critical role in the implementation of U.S. government housing policy + Integral link to the U.S. government + Continuing financial support from the U.S. Treasury + Dominant market position as a secondary-market liquidity provider to the U.S. residential mortgage market + Significant improvements in risk management since the financial crisis + Structural inability to add to its extremely slim reported equity once it reaches $25 billion (albeit up from $3 billion) + Monoline exposure to the U.S. mortgage market + Delinquencies will likely rise as a result of the economic fallout from COVID-19 and test the effectiveness of credit enhancements and private investors' risk appetite + Substantial uncertainties regarding impact of potential legislative changes...

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