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84 84 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal FANNIE MAE CLOSES TWO MORE CIRT TRANSACTIONS Fannie Mae has executed its seventh and eighth Credit Insurance Risk Transfer (CIRT) transactions of 2022. CIRTs are part of the GSEs' ongoing effort to reduce taxpayer risk by increasing the role of private capital in the mortgage market, as CIRT 2022-7 and CIRT 2022-8 transferred $1 billion of mortgage credit risk to private insurers and reinsurers. Since inception to date, Fannie Mae has acquired approximately $21 billion of insurance coverage on $709 billion of single-family loans through the CIRT program, measured at the time of issuance for both post-acquisition (bulk) and front-end transactions. e covered loan pool for CIRT 2022-7 consists of approximately 64,000 single- family mortgage loans with an outstanding unpaid principal balance of approximately $19.8 billion. e covered pool includes collateral with loan-to-value (LTV) ratios of 60.01%—80% acquired in September 2021. e loans included in this transaction are fixed- rate, generally 30-year term, fully amortizing mortgages, and were underwritten using rigorous credit standards and enhanced risk controls. With CIRT 2022-7, which became effective June 1, 2022, Fannie Mae will retain risk for the first 55 basis points of loss on the $19.8 billion covered loan pool. If the $109 million retention layer is exhausted, 24 insurers and reinsurers will cover the next 335 basis points of loss on the pool, up to a maximum coverage of $664 million. e covered loan pool for CIRT 2022-8 consists of approximately 43,000 single-family mortgage loans with an outstanding unpaid principal balance of approximately $12.9 billion. e covered pool includes collateral with LTV ratios of 80.01%—97% acquired between August 2021 and September 2021. e loans included in this transaction are fixed-rate, generally 30-year term, fully amortizing mortgages, and were underwritten using rigorous credit standards and enhanced risk controls. With CIRT 2022-8, which became effective June 1, 2022, Fannie Mae will retain risk for the first 65 basis points of loss on the $12.9 billion covered loan pool. If the $84 million retention layer is exhausted, 19 insurers and reinsurers will cover the next 275 basis points of loss on the pool, up to a maximum coverage of $354 million. "We appreciate our continued partnership with the 24 insurers and reinsurers that have committed to write coverage for these deals," said Rob Schaefer, Fannie Mae VP for Capital Markets. Fannie Mae notes that its credit risk management is the "cornerstone" of its single-family business, and as one of the largest guarantors of U.S. mortgages, the GSE actively manages credit risk throughout the loan lifecycle, from underwriting to disposition. Fannie Mae also sets servicing standards, acts as Master Servicer, and provides oversight of loan servicers—setting standards for loss mitigation and borrower workout options. e GSE also conducts all property management and disposition in-house, managing one of the industry's largest real estate-owned portfolios. eir strategy is to sell nondistressed homes to owner-occupants, helping to maximize sales proceeds, stabilize neighborhoods, and preserve the value of its guaranty book. Coverage for the CIRTs is provided based upon actual losses for a term of 12.5 years. Depending on the paydown of the insured pools and the principal amount of insured loans that become seriously delinquent, the aggregate coverage amounts may be reduced at the one-year anniversary and each month thereafter. e coverage on these deals may be canceled by Fannie Mae at any time on or after the five-year anniversary of the effective date by paying a cancellation fee. As of March 31, 2022, approximately $906 billion in outstanding UPB of loans in our single-family conventional guaranty book of business were included in a reference pool for a credit risk transfer transaction. To promote transparency and to help insurers and reinsurers evaluate the CIRT program, Fannie Mae provides ongoing, robust disclosure data, as well as access to news, resources, and analytics through its credit risk transfer webpages. is includes Fannie Mae's Data Dynamics tool that enables market participants to interact with and analyze both CIRT deals that are currently outstanding in the market and

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