Late yesterday afternoon, the Federal National Mortgage Association (“Fannie Mae”) announced its intention to request up to $16 billion in aid from the Treasury. The move comes in the wake of the Federal Home Loan Mortgage Corporation’s (“Freddie Mac”) Friday announcement that it will require an additional capital injection of up to $35 billion. Like Freddie Mac, Fannie Mae will draw on its $100 billion senior preferred stock funding arrangement with the Treasury.
Fannie Mae cited disappointing preliminary financial data from the fourth quarter and year end as prompting the request. This marks the first time Fannie Mae has needed to draw on Treasury support arrangement that was established when it was placed into conservatorship in September 2008.