Fannie Mae-No Politics (FNMA)

[Here I am]

The Loan Loss Reserve is TIER 2 Capital that adds up to the Core Capital to form the Total Capital, which is the amount that must meet the Risk-Based capital requirement to become Adequately Capitalized.
The FHFA asked a question in the comment period of its capital proposal whether the Loan Loss Reserve should be considered Capital because it argued that it shouldn't, obviously, as its role is to damage the enterprises.
My comment in the FHFA's website was that the Loan Loss Reserve is Capital because it absorbs losses (function of every item deemed Capital), since the credit losses are charged against this reserve and not against earnings. This is why you don't see the credit losses in their Income Statements.
For this reason, and other 3 or 4 reasons submitted in other comments, we will never see the FHFA's capital proposal come to light. They will recover the old FHEFSSA's formula that gave the outcome of a Risk-Based Capital of 2% of Total Assets. Around $116 billion.