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Single-Family Business Results
Table 15 summarizes the financial results of our Single-Family business for the periods indicated. The primary sources of revenue for our Single-Family business are guaranty fee income and fee and other income. Expenses primarily include credit-related expenses, net interest expense and administrative expenses.
Table 15:  Single-Family Business Results
    For the Three Months Ended March 31,  
    2011     2010     Variance  
    (Dollars in millions)  
Statement of operations data:(1)
Net interest expense
  $ (898 )   $ (1,945 )   $ 1,047  
Guaranty fee income(2)
    1,871       1,768       103  
Credit-related expenses(3)
    (11,106 )     (11,926 )     820  
Other expenses(4)
    (586 )     (513 )     (73 )
Loss before federal income taxes
    (10,719 )     (12,616 )     1,897  
Benefit (provision) for federal income taxes
    (2 )     51       (53 )
Net loss attributable to Fannie Mae
  $ (10,721 )   $ (12,565 )   $ 1,844  
Other key performance data:
Single-family effective guaranty fee rate (in basis points)(5)
    26.0       24.4          
Single-family average charged guaranty fee on new acquisitions (in basis points)(6)
    26.1       26.9          
Average single-family guaranty book of business(7)
  $ 2,881,300     $ 2,893,988          
Single-family Fannie Mae MBS issues(8)
  $ 166,673     $ 124,358          
(1) Certain prior period amounts have been reclassified to conform to the current period presentation.
(2) Guaranty fee income is included in fee and other income in our condensed consolidated statements of operations and comprehensive loss.
(3) Consists of the provision for loan losses, provision for guaranty losses and foreclosed property income or expense.
(4) Consists of investment gains and losses, fee and other income, administrative expenses and other expenses.
(5) Calculated based on annualized Single-Family segment guaranty fee income divided by the average single-family guaranty book of business, expressed in basis points.
(6) Calculated based on the average contractual fee rate for our single-family guaranty arrangements entered into during the period plus the recognition of any upfront cash payments ratably over an estimated average life, expressed in basis points.
(7) Consists of single-family mortgage loans held in our mortgage portfolio, single-family mortgage loans held by consolidated trusts, single-family Fannie Mae MBS issued from unconsolidated trusts held by either third parties or within our retained portfolio, and other credit enhancements that we provide on single-family mortgage assets. Excludes non-Fannie Mae mortgage-related securities held in our investment portfolio for which we do not provide a guaranty.
(8) Reflects unpaid principal balance of Fannie Mae MBS issued and guaranteed by the Single-Family segment during the period. The three months ended March 31, 2010 includes Housing Finance Agency (HFA) new issue bond program issuances of $3.1 billion. There were no HFA new issue bond program issuances in 2011.
Net Interest Expense
Net interest expense for the Single-Family business segment includes: (1) the cost to reimburse the Capital Markets group for interest income not recognized for loans in our mortgage portfolio on nonaccrual status; (2) the cost to reimburse MBS trusts for interest income not recognized for loans in consolidated trusts on nonaccrual status; (3) cash payments received on loans that have been placed on nonaccrual status; and (4) an allocated cost of capital charge among our three business segments. Net interest expense decreased in the first quarter of 2011 compared with the first quarter of 2010 primarily due to a significant decrease in interest