Government and GSEs
Conservatorship of Fannie/Freddie
Date:
September 7, 2008
Who:
FHFA
Policy Area:
Sector Policy (Non-Financial)
Economic Target:
Government and GSEs
Action Type:
Government Conservatorship
Deficit Impact:
$389.00 billion Placement of Fannie Mae and Freddie Mac into government conservatorship by the Federal Housing Finance Agency, until the institutions are deemed to have been stabilized. Conservatorship was coupled with other actions to ensure liquidity.
CBO estimates that $291 billion in federal outlays went towards the conservatorship of Fannie and Freddie in 2009, with a projected $98 billion in subsidies over the next 10 years.
Notes:
Deficit impact represents CBO's estimate of the cost of bringing Fannie Mae and Freddie Mac "on-budget" for 2009-2019 (per CBO's proposed budgetary treatment) calculated by assessing the risk-adjusted net present value of Fannie Mae's and Freddie Mac's current net liabilities, plus their subsidy costs for 2009. (http://www.cbo.gov/ftpdocs/108xx/doc10878/01-13-FannieFreddie.pdf).
