Reading Between the Lines of the GSEs Losses

From a balance sheet perspective, the situation could not be grimmer for Fannie Mae and Freddie Mac. The two government sponsored entities posted yet another quarter of eye-popping losses for Q1: Fannie Mae’s $13.1 billion loss necessitated a request for $8.4 billion in additional federal funds. Freddie Mac, for its part, posted $8 billion in red ink-and had to ask for a $10.6-billion government infusion of capital.

For multifamily players that rely on Fannie and Freddie, there is some good news-and some more bad. The vast majority of the GSE losses are driven by their single-family portfolios. At Freddie Mac, for example, the 60-day delinquency rate on its multifamily portfolio is just 0.24%, according to Sam Chandan, chief economist at Real Capital Analytics.