Fannie Mae Exceeds $3 Billion in Single-Family Labeled Social Bond Issuance

Rhea-AI Summary

Fannie Mae (OTCQB: FNMA) announced surpassing $3 billion in single-family labeled social bond issuances. This is facilitated by the new Social Indicator, which helps investors identify mortgage-backed securities (MBS) issued since March 1, 2024, under Fannie Mae's Single-Family Social Bond Framework.

The platform enhancements, including PoolTalk® and Data Dynamics®, enable investors to track over $3.6 billion in issued social bonds and future issuances. Monthly issuances of over $600 million in Social MBS attract investors both with and without a social objective.

These bonds support populations facing barriers to affordable housing and credit access, aligning with global standards and validated by a Second Party Opinion. Annual impact reports will also be provided to detail the social impacts of these investments.

Positive

• Surpassed $3 billion in single-family labeled social bond issuances.
• Introduced Social Indicator to help investors identify suitable mortgage-backed securities.
• Monthly issuances of over $600 million in Social MBS since March 2024.
• Social bonds attract a broader investor base, including those with social objectives.
• Bonds support populations facing barriers to affordable housing and credit access.
• Adheres to global standards and validated by a Second Party Opinion.
• Annual impact reports will provide transparency on social impacts.
• Enhanced platforms (PoolTalk® and Data Dynamics®) for investor accessibility.

Negative

• No specific financial returns or performance metrics mentioned for the social bonds.
• Potential investor concerns about the long-term impact and sustainability of these social bonds.
• Increased issuance may lead to market saturation and affect bond value.

Social Bond Indicator Provides Insight into Programmatic Social Bond Issuance

WASHINGTON, June 6, 2024 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) released a new disclosure for its single-family mortgage-backed securities (MBS), the Social Indicator. This disclosure helps investors easily identify MBS issued since March 1, 2024 that meet the criteria outlined in Fannie Mae's Single-Family Social Bond Framework.

"We're pleased to provide a social label to help investors better identify pools that are highly aligned with Fannie Mae's mission," said Devang Doshi, Senior Vice President, Single-Family Capital Markets. "With the Social Indicator, investors using our PoolTalk^® and Data Dynamics^® platforms and other third-party systems, such as Bloomberg, can now easily identify the over $3.6 billion in single-family social bonds that Fannie Mae has issued to date and monitor future issuance to analyze for fit in their portfolio."

This latest disclosure enhancement is another step Fannie Mae has taken to attract new sources of capital to the U.S. mortgage market.

"Since March, Fannie Mae's Whole Loan Conduit has offered monthly issuances of over $600 million in Social MBS to investors, and plans to continue to issue these bonds programmatically," said Nick Sapirie, Vice President, Single-Family Capital Markets. "These MBS offer an attractive profile to investors with a social objective, and those without. The premiums that investors pay for these securities help to encourage lending to the borrowers we are chartered to support, a dynamic we've highlighted in a recent Perspectives blog and research paper. We've also seen consistent issuance from several MBS lenders using our platform."

Fannie Mae's Single-Family Social Bonds are backed by loans to populations that typically face barriers to obtaining affordable housing or access to credit. Fannie Mae's Mission Index™ disclosure is the foundation of the Single-Family Social Bond Framework, which adheres to global standards and is validated by a Second Party Opinion.

"Fannie Mae's Mission Index and single-family social bond framework have significantly increased market transparency by providing pool-level insights into the underlying loans in collateral pools," said Dennis Lee, Securitized Credit Analyst Team Leader, and Ramon de Castro, Portfolio Manager, MBS and RMBS Strategies, both of T. Rowe Price Associates, Inc. "Fannie Mae's thoughtful approach gives us confidence that proceeds are being efficiently allocated to target populations, generating improved outcomes for both target populations and investors, as well as enabling us to share tangible metrics of social impact in U.S. housing with clients."

In line with social bond practices, Fannie Mae will also provide annual impact reporting to help the market understand the social impact of the loans underlying their investments.

To learn more about how premiums investors pay for MBS promote mortgage lending, read "Benefiting Borrowers with a Creative MBS Disclosure Solution."

Related Links:

Single-Family Social Bonds

The Mission Index^TM

Second Party Opinion

PoolTalk^®

Data Dynamics^®

About Fannie Mae
Fannie Mae advances equitable and sustainable access to homeownership and quality, affordable rental housing for millions of people across America. We enable the 30-year fixed-rate mortgage and drive responsible innovation to make homebuying and renting easier, fairer, and more accessible. To learn more, visit: fanniemae.com | Twitter | Facebook | LinkedIn | Instagram | YouTube | Blog

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This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae.  Nothing in this press releases constitutes advice on the merits of buying or selling a particular investment.  Any investment as to any purchase or sale of securities referred to herein must be made solely on the basis of information contained in the MBS Prospectus and the related Prospectus Supplement, and no reference may be placed on the completeness or accuracy of the information contained in this press release. 

You should not deal in securities unless you understand their nature and the extent of your exposure to risk.  You should be satisfied that they are suitable for you in light of your circumstances and financial position. If you are in any doubt, you should consult an appropriately qualified financial advisor. 

This release includes forward-looking statements, which are based on Fannie Mae's present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur.  Actual results may turn out to be materially different from these statements due to a variety of factors, including, but not limited to, those discussed in "Risk Factors" and elsewhere in the MBS Prospectus, the related Prospectus Supplement and the documents incorporated by reference therein[, including in the "Forward-Looking Statements" and "Risk Factors" sections of Fannie Mae's annual report on Form 10-K for the year ended December 31, 2023 and its quarterly report on Form 10-Q for the quarter ended March 31, 2024].  All forward-looking statements are made as of the date of this press release, and Fannie Mae assumes no obligation to update this information.

 

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SOURCE Fannie Mae

FAQ

What did Fannie Mae achieve with its single-family social bonds?

Fannie Mae surpassed $3 billion in single-family labeled social bond issuances, helping to identify and support mortgage-backed securities under its Single-Family Social Bond Framework.

What is the Social Indicator introduced by Fannie Mae?

The Social Indicator helps investors identify mortgage-backed securities issued since March 1, 2024, under Fannie Mae's Single-Family Social Bond Framework.

How much has Fannie Mae issued in social bonds to date?

Fannie Mae has issued over $3.6 billion in single-family social bonds to date.

What is the issuance frequency of Fannie Mae's Social MBS?

Fannie Mae has been issuing over $600 million in Social MBS on a monthly basis since March 2024.

Who benefits from Fannie Mae's Single-Family Social Bonds?

These bonds benefit populations facing barriers to affordable housing and credit access, aligning with Fannie Mae's mission.

What standards do Fannie Mae's Single-Family Social Bonds adhere to?

The bonds adhere to global standards and are validated by a Second Party Opinion.

What transparency measures are included in Fannie Mae's social bond framework?

Fannie Mae provides annual impact reports detailing the social impacts of the underlying loans in their social bonds.