Fannie Mae Unsure on Tax Credits Sale

Fannie Mae (NYSE:FNM) is deciding whether it can proceed with a sale of tax credits after the Treasury said on Friday it would block the sale of those investments to Goldman Sachs Group (GS.N).

The company on Monday said it could record additional impairments in the fourth quarter, if it is unable to sell or transfer these low income housing tax credits. Fannie Mae said “Because we expect to have a net worth deficit in future periods, the impairment will increase the amount that would be requested from Treasury by FHFA, on our behalf under the senior preferred stock purchase agreement.”

On Thursday, the company reported a quarterly loss of about $19 billion, as we mentioned in a previous post. Fannie Mae said it was awaiting Treasury approval to transfer the credits to unnamed investors.

Fannie Mae said that it will be hard to sell or even transfer the tax credits, which are incentives designed to bring more investment to low-income housing developments. To read more on this story go to reuters.com.