Feb. 14 (UPI) — Fannie Mae reported a net loss of $6.5 billion in the fourth quarter of 2017, blaming a “one-time accounting charge” caused by the GOP’s tax reform plan for the financial hurdle.
The mortgage giant said in a report Wednesday that it expects the director of the Federal Housing Finance Agency to request $3.7 billion from the Treasury Department on the company’s behalf.
A $9.9 billion charge stemmed from re-calculations of the company’s deferred tax assets following the Tax Cuts and Jobs Act, which President Donald Trump signed into law on Dec. 22.
“Our 2017 results demonstrate that the fundamentals of our business are strong,” Timothy J. Mayopoulos, the President and CEO of Fannie Mae, said. “While the fourth quarter was affected by a one-time accounting charge, we expect to benefit from a lower tax rate going forward.”
Fannie Mae has a line of credit with the Treasury Department, and even after taking out $3.7 billion, it would still have $113.9 billion remaining on its credit line.
If Fannie Mae receives the cash infusion, it will mark the first time since 2012 that the government has been forced to pour money into the mortgage association.
Despite taking a loss in its final quarter, Fannie Mae benefitted from improvements in the housing market — the home-price index increased 5.6 percent in the fourth quarter.
Additionally, Fannie Mae provided more than $67 billion in multifamily and other rental financing in 2017, the company said. The report also said the company supported 770,000 units of multifamily housing — the highest multifamily rental volume in the history of its Delegated Underwriting and Servicing program.
Fannie Mae said its 2017 net income was $2.5 billion, compared with 2016’s net income of $12.3 billion. The mortgage giant added that its annual pre-tax income for 2017 was $18.4 billion, compared with $18.3 billion in 2016 which it said reflects “the strength of the company’s underlying business fundamentals.”
“We are in a strong position to serve the changing needs of homeowners and renters, and to advance our vision to be America’s most valued housing partner,” Mayopoulos said.