Fannie Mae-No Politics (FNMA)

[capitalismforever]

The capital buffer (aka capital reserve) reaches $0 1Q 2018. That means an amount equal to shareholders equity (net worth) will be swept each quarter from the GSE's. Right now, equity for Fannie Mae is $6b. If it were 2018 today, the quarterly sweep would equal $6b.

Because of the expected change in corporate taxes from 35% to 20%, the company will be forced to impair approximately $19b of their assets. So, if equity is $6b and a $19b write off takes place, equity would equal $-13b. In that situation, the company would be forced to take another draw from the Treasury which, at Treasury's discretion, could force the company into receivorship.