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    Is Fannie Mae’s Expanding Mortgage Book Quietly Reframing Its Post‑Conservatorship Strategy (FNMA)?

    Simply Wall St·12/18/2025 12:22:13
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    • In recent months, Fannie Mae and Freddie Mac have added billions of dollars of mortgage-backed securities and home loans to their balance sheets, prompting speculation that they are positioning for potential public offerings.
    • This portfolio expansion is being interpreted as an effort to enhance profitability and borrower appeal, while high-profile investor interest intensifies focus on their eventual return to public markets.
    • With Fannie Mae’s renewed appetite for mortgage-backed securities in focus, we’ll now examine how this could shape its broader investment narrative.

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    What Is Federal National Mortgage Association's Investment Narrative?

    For anyone considering Fannie Mae, the core belief is that the company’s role at the center of the U.S. housing finance system will ultimately be rewarded if it can move beyond conservatorship and chronic unprofitability. The recent build-up of mortgage-backed securities and loans feeds into that story by hinting at preparation for a potential public offering and a sharper focus on earnings power, which could be a meaningful short term catalyst if regulators signal support. At the same time, earnings remain uneven, forecast profitability is weak, and the balance sheet is stretched, while board and management turnover under FHFA oversight underlines how much control still sits in Washington. The portfolio expansion may improve economics at the margin, but it also amplifies policy and credit risk if conditions turn.

    However, one key policy risk could reshape the equity case far more than recent earnings trends. Federal National Mortgage Association's share price has been on the slide but might be dropping deeper into value territory. Find out whether it's a bargain at this price.

    Exploring Other Perspectives

    FNMA 1-Year Stock Price Chart
    FNMA 1-Year Stock Price Chart
    Twelve fair value estimates from the Simply Wall St Community span roughly US$2 to over US$90, underscoring how far apart individual views can be. When you set that against today’s conservatorship overhang and the heightened policy risk around any future public offering, it is clear why many market participants are reaching very different conclusions about Fannie Mae’s longer term potential.

    Explore 12 other fair value estimates on Federal National Mortgage Association - why the stock might be worth less than half the current price!

    Build Your Own Federal National Mortgage Association Narrative

    Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.