WASHINGTON (AP) — Government-controlled mortgage companies Fannie Mae and Freddie Mac posted profits for the April-June period as the U.S. housing market continued to recover. Gains in recent years have enabled them to fully repay their government aid after being rescued during the financial crisis in 2008.
Fannie Mae reported Thursday that it earned $3.7 billion in the second quarter. Washington-based Fannie will pay a dividend of $3.7 billion to the U.S. Treasury next month. With its previous payments totaling $126.7 billion, Fannie has more than fully repaid the $116 billion it received from taxpayers.
Freddie Mac posted net income of $1.4 billion for the latest quarter. Freddie, based in McLean, Virginia, will pay a dividend of $1.9 billion to the government. Freddie will have paid $88.2 billion in dividends, exceeding its full government bailout of $71.3 billion.
Freddie had fully repaid as of last year's third quarter, and Fannie as of the fourth quarter.
The government rescued Fannie and Freddie at the height of the crisis in September 2008 when both veered toward collapse under the weight of losses on risky mortgages. Together the companies received taxpayer aid totaling $187 billion.
The gradual recovery of the housing market has made Fannie and Freddie profitable again. Their repayments of the government loans helped make last year's federal budget deficit the smallest in five years.
U.S. home prices have risen steadily since housing began to recover in 2012. But home prices remain about 17 percent below the peaks reached in the summer of 2006, just before the housing market bust.
And while sales of existing homes have picked up, new home sales plummeted in June. New home construction has fallen for two straight months. That could lead to fewer construction jobs.
Fannie's $3.7 billion earnings in the second quarter were down 63 percent from $10.1 billion in the same period of 2013. Increases in home prices slowed sharply in the April-June period from a year earlier, reducing Fannie's income, the company said.
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