Fannie And Freddie: Stress Test Results Confirm Need For 4% Capital Levels

Seeking Alpha - May 1, 2015 - May 4, 2015

By David Sims

The Federal Housing Finance Agency just released the results of the annual stress tests for Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC). Under the severely adverse economic scenario, the companies would need $157.3 billion in capital. Before you jump to the conclusion that this number is too high (or too low), let’s put this in context.

Fannie Mae has $3.25 trillion in assets and Freddie Mac has $1.95 trillion in assets. That’s $5.2 trillion combined. As a percentage of the total, the $157.3 billion is 3.0%.

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