GSEs Expected to Cost an Additional $42 Billion

During a June 2 hearing of the House Budget Committee, a representative from the Congressional Budget Office (CBO) testified that mortgage guarantees made by Fannie Mae and Freddie Mac could cost the federal government an additional $42 billion over the coming decade.

In her testimony, the CBO Assistant Director for Financial Analysis indicated that through the end of March 2010 the federal government provided roughly $154 billion in capital for the two GSEs. The two have paid back in excess of $24 billion in dividends, bringing their net cost to tax payers $130 billion.

However, according to CBO analysis, if their business continues on current trends—in 2010 Fannie Mae and Freddie Mac financed 63 percent of new mortgages originated—new guarantees the GSEs make between 2012 and 2021 will cost the government $42 billion.

So, far nearly 20 bills have been introduced in the House of Representatives reforming Fannie Mae and Freddie Mac, and restructuring the nation’s housing finance system.

Click here for more information.

For additional information, members can contact Jason Boehlert at 703-558-0660 or

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