U.S. Housing Agencies May Require Additional Taxpayer Funds During a Crisis, Says Regulator – Reuters

Title: Fannie Mae and Freddie Mac Face Potential Cash Shortfall in Economic Downturn

WASHINGTON (Reuters) – Fannie Mae and Freddie Mac, two government-backed housing finance agencies, may require substantial financial support to navigate another economic crisis, according to a government regulator.

A recent ‘stress test’ conducted by the Federal Housing Finance Agency indicates that these companies could need as much as $126 billion in taxpayer assistance to survive a severe downturn.

Since their government takeover in September 2008 amid the global financial crisis, Fannie Mae and Freddie Mac have received $187 billion from the U.S. Treasury. However, as the housing market improved, they have repaid approximately $250 billion to the Treasury.

Discussions among lawmakers regarding the future of these agencies remain unresolved.

The stress test mandated by the Dodd-Frank reform legislation of 2010 estimates that the companies might need to draw between $49 billion and $126 billion in the event of a serious economic downturn.