White House analysts predict that Fannie and Freddie could return $179.2 billion in profits to taxpayers over the next decade, Bloomberg reported. That estimate is a big boost from last year’s projections, which predicted a $51 billion profit from Fannie and Freddie through 2023, according to Bloomberg.
The mortgage finance giants were taken into government conservatorship in 2008 after teetering on the edge of insolvency in the wake of the financial meltdown. To stay afloat, they were given $187.5 million in taxpayer aid. In return, Fannie and Freddie turn over their quarterly profits to the government as dividends. By the end of the month, the companies will have paid the Treasury $202.9 billion.
Both parties want to wind down the mortgage finance giants at some point. But until then the money should continue to flow into the government’s coffers, since it counts as dividend payments on stock and not repayments on a loan.
Fannie Mae and Freddie Mac could be cash cows for the government if they stay under federal conservatorship, according to White House budget estimates.