Fannie Mae

Good day and welcome to the Fannie Mae First Quarter 2024 Financial Results Conference Call. At this time, I will now turn it over to your host, Pete Backell, Fannie Mae's Director of External Communications.

Hello, and thank you all for joining today's conference call to discuss Fannie Mae's First Quarter 2024 Financial Results. Please note this call includes forward-looking statements, including statements about Fannie Mae's expectations related to economic and housing market conditions, the future performance of the company's book of business, and the company's business plans and their impact. Future events may turn out to be very different from these statements. The forward-looking statement sections in the company's first quarter 2024 Form 10-Q filed today, and in the risk factors and forward-looking statements sections in the company's 2023 Form 10-K filed on February 15, 2024, describe factors that may lead to different results. A recording of this call may be posted on the company's website. We ask that you do not record this call for public broadcast and that you do not publish any full transcript. I'd now like to turn the call over to Fannie Mae Chief Executive Officer Priscilla Almodovar and Fannie Mae Chief Financial Officer Priscilla C. Halley.

Welcome and thank you for joining us today. I'll begin this morning by spending a few minutes on the economic environment. and then we'll turn it to our financial and mission performance for the first quarter of 2024. After that, our Chief Financial Officer, Chris Ahilly, will discuss our first quarter results in more detail. The U.S. economy in the first quarter continued to grow, but at a slower pace. First quarter GDP was 1.6%. Inflation remained persistent at 3.2%, still above the Federal Reserve's 2% target. The 30-year fixed rate mortgage rate averaged 6.7% during the quarter compared to 7.3% in the fourth quarter of 2023. Home supply continued to be constrained, and as a result, home prices remained strong. We estimate that home prices rose 1.7% during the quarter. Current interest rates combined with high home prices continued to put pressure on housing affordability. Despite these pressures, consumers seem to be adjusting their expectations on mortgage rates and the home price environment. According to our recent home purchase sentiment index, consumers are slightly more optimistic about both home buying and home selling conditions. For lenders, overall market single-family mortgage origination activity continued to be sluggish, at an estimated $330 billion for the quarter and relatively flat compared to the prior quarter. In multifamily, the market stock property values continue to decline. Nationally, there was slight rent growth of an estimated 25 basis points in the first quarter after rent declines in the prior one. Despite the softening in rent, affordability continues to remain a challenge for renters in many parts of the country. Turning to our first quarter financial results, we reported $4.3 billion in net income compared to $3.9 billion in Q4. As a result, through our retained earnings, we continued to build our net worth, which increased to $82 billion as of the end of March. This further bolsters our financial stability, which enables us to continue to deliver on our mission. To that end, we provided $72 billion of liquidity to the single-family and multifamily markets in the first quarter. In doing so, we helped 280,000 households buy, refinance, or rent a home. This included approximately 89,000 units of multifamily rental housing. the significant majority of which were affordable to households earning at or below 120% of area median income. We also helped 76,000 first-time homebuyers to purchase a home. These numbers demonstrate our commitment to serving the housing market. We are focused on shaping a market that works better for everyone. This includes our continued work to alleviate obstacles that many renters and homebuyers face in their home purchase journey, specifically insufficient credit and high upfront costs. For example, this past quarter, we announced a temporary enhancement to Home Ready, our flagship 3% down 30-year mortgage product, to include $2,500 to use towards down payment or closing costs for purchase borrowers who make no more than 50% of area median income. We also expanded our Home Ready First Special Purpose Credits Program to an additional 15 markets for a total of 21 markets. This program offers flexibility such as down payment assistance, expanded income level eligibility, and reduced closing costs for borrowers residing in these markets. And just yesterday, we published a new first-generation homebuyer definition for use by the housing industry. Disparities in homeownership and wealth among families are strongly correlated to homeownership from prior generations. We hope that developing a standard definition allows the industry to understand and explore new ways of addressing these disparities and to scale programs to support these homebuyers. We are also creatively using our role in the capital markets to support our mission. This past quarter, we launched our Enhanced Single Family Mission Index Disclosures, which help interested mortgage-backed security investors allocate their capital in support of affordable housing and underserved borrowers and markets. These disclosures are the foundation of our single-family social bonds, which are designed to attract additional capital to U.S. housing. To play our important role of providing liquidity and stability to the U.S. housing system, we are laser-focused on risk management. In fact, our ability to deliver on our mission depends on it. You'll see this through our sound underwriting standards and the ways we are responsibly helping the housing market see and serve more people. You'll also see this through our servicing standards and support we provide to homeowners and renters in distress. These efforts not only help the consumers that the housing market serves, but they make our business and the market more resilient. Thanks to our dedicated teams, We're continuing to deliver on our mission to facilitate equitable and sustainable access to home ownership and quality affordable rental housing across America. Now, I'll turn it over to Krissa to discuss our first quarter financial results.