Fannie Mae on Wednesday reported a fourth-quarter net loss of $6.5 billion, a steep year-over-year decline that the government-sponsored, publicly traded entity attributed to a one-time accounting charge brought on by changes to the tax code that passed into law in December.

Fannie Mae on Wednesday reported a fourth-quarter 2017 net loss of $6.5 billion, a steep year-over-year decline that the government-sponsored, publicly traded entity attributed to a one-time accounting charge brought on by changes to the tax code that passed into law in December. For full-year 2017, Fannie Mae posted a net income of $2.5 billion, down from $12.3 billion in 2016.

The changes in income for the fourth quarter and full year, which plunge Fannie Mae into a $3.7 billion deficit, were driven primarily by a $9.9 billion provision outlined in the “Tax Cuts & Jobs Act” that remeasured the entity’s deferred tax assets using a lower corporate rate. That lower rate, estimated at 20 percent, is expected to benefit Fannie Mae in 2018, officials said in the Wednesday report.

“Our 2017 results demonstrate that the fundamentals of our business are strong,” said Timothy Mayopoulos, the president and chief executive of Fannie Mae, in a prepared statement. “While the fourth quarter was affected by a one-time accounting charge, we expect to benefit from a lower tax rate going forward. As we mark 80 years of serving America’s housing market, our focus is on building a strong, stable housing finance system for the future.”

As a result of the deficit, Fannie Mae officials on Wednesday said the Federal Housing Finance Agency, which regulates the entity, would submit a request to the Treasury Department for $3.7 billion in taxpayer funding to close the gap, according to the quarterly report. If the request for funding is accepted, it would mark the first time since 2012 that the government has had to bail out Fannie Mae, according to The Wall Street Journal in a report on Wednesday morning.

Following the 2008 housing crisis, Fannie Mae and its little brother, Freddie Mac, were placed in conservatorship, by which the Federal Housing Finance Agency was appointed to manage the government-sponsored entity’s financial affairs. Under terms of the deal, Fannie is required to pay back the government through quarterly dividends.

In December, the Federal Housing Finance Agency entered into an agreement with the Treasury Department that adjusted the dividend provisions of the deal. The agreement increased the capital reserve amount to $3 billion and reduced the dividend by $2.4 billion.

Email Jotham Sederstrom

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×