Fannie Mae Wants Another Multi-Billion Taxpayer Bailout
Fannie Mae incurred a net loss of $6.5 billion in the final quarter of 2017 and announced Wednesday it is in desperate need of a taxpayer bailout.
Fannie Mae said Wednesday the Federal Housing Agency (FHA) is seeking a $3.7 billion infusion of taxpayer money from the U.S. Treasury to make up for the loss, which reportedly stemmed from the changes Republicans made to the corporate tax code.
Due to the terms of its first taxpayer bailout, Fannie Mae operates with limited capital stores, which is why it cannot pay for the loss on its own.
The original agreement struck after the 2008 housing crisis required Fannie Mae and Freddie Mac to give their quarterly dividends to the U.S. Treasury until its capital reserves reached zero. Put simply, the government required Fannie and Freddie to send almost all of its profits to the Treasury.
The Treasury Department and the FHA eased those restrictions in 2017, allowing the agencies to hold $3 billion in capital stores to guard against potential losses.
If approved, it would be the first time the government put capital into Fannie since March 2012.
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