​Background 

• This report provides updated information on possible ranges of future financial results of Fannie Mae and Freddie Mac (the “Enterprises”) under severely adverse conditions, which are consistent for both Enterprises.
  
• The Enterprises are required to conduct stress tests per FHFA rule 12 CFR § 1238, which implements section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Section 165(i)(2) of the Dodd-Frank Act requires certain financial companies with total consolidated assets of​ ​more than $10 billion, and which are regulated by a primary Federal financial regulatory agency, to conduct annual stress tests to determine whether the companies have the capital necessary to absorb losses as a result of adverse economic conditions. This is the second implementation of the Dodd-Frank Act Stress Tests (DFAST).
  
• The projections reported here are not expected outcomes. They are modeled projections in response to “what if” exercises based on assumptions about Enterprise operations, loan performance, macroeconomic and financial market conditions, and house prices. The projections do not define the full range of possible outcomes. Actual outcomes may be very different.
  
• An overview of the DFAST Severely Adverse scenario is described on page 4. The Enterprises used their respective internal models to project their financial results based on the assumptions provided by the Federal Reserve and FHFA.
  
• While this effort achieves a degree of comparability between the Enterprises, it does not eliminate differences in their respective internal models, accounting differences, or management actions.
  

• As of September 30, 2014, the Enterprises have drawn a combined $187.5 billion from the Department of the Treasury under the terms of the Senior Preferred Stock Purchase Agreements (the “PSPAs”).
• The combined remaining funding commitment under the PSPAs as of September 30, 2014 was $258.1 billion.
  
• Under the Severely Adverse scenario, incremental Treasury draws range between $68.6 billion and $157.3 billion depending on the treatment of deferred tax assets.
  
• The remaining funding commitment under the PSPAs ranges between $189.4 billion and $100.8 billion depending on the treatment of deferred tax assets.​