Subsidyscope

Loans, Loan Guarantees and Other Risk Transfers in the Housing Sector

Housing-related activities in the U.S. are bolstered by federal government programs that, directly or indirectly, facilitate and broaden access to mortgage markets. Through loans, loan guarantees, and other risk transfers, the federal government assumes risks on behalf of taxpayers that would otherwise be borne by individuals, businesses or other investors. These efforts can improve the ability of homebuyers and developers to obtain financing to purchase, construct or renovate homes.

Through such risk transfers, the government has made a large financial commitment to housing. In 2009 (all years are fiscal years unless otherwise stated), more than $4 billion was directly loaned to individuals or companies for the purpose of financing homes (see Table 1 below). Also in 2009, federal agencies issued guarantees totaling $688 billion on loans for housing-related activities (see Table 2 below); this includes guarantees of securities backed by mortgages already carrying a federal guarantee. The ultimate subsidy cost of these loan and guarantee commitments is uncertain, as most are projected to be repaid by the borrowers and some federal sources project they may result in a profit to the government.1 In addition, these estimates do not take into account administrative costs or market risk and are likely underestimates (see Box 1 below for more information).

In addition, the government provided a net $93 billion to Fannie Mae and Freddie Mac in fiscal year 2009 by purchasing preferred stock from these two housing-related government sponsored enterprises (GSEs).2 On a fair value basis, the Congressional Budget Office (CBO) has estimated the subsidy cost of taking on their liabilities to be $291 billion through 2009.3 Federal agencies also purchased more than a trillion dollars of mortgage-backed securities issued or guaranteed by GSEs, among other activities related to the government response to the financial crisis.4 It is difficult to analyze the extent to which some of these actions contain subsidies specific to the housing sector. Subsidyscope presents these activities in order to illustrate the government's role in this sector; these estimates should be used with caution as it may take several years to determine how much subsidy they will ultimately convey.

The subsidy costs of housing loans and guarantee programs are uncertain and likely underestimates, and costs for Fannie Mae and Freddie Mac vary widely. Therefore, Subsidyscope does not add them to grants and tax expenditures.

Direct Loan Programs: Small Portion of Risk Transfers

In 2009, the federal government obligated $4 billion in direct loans for housing, a 90 percent increase over the $2.2 billion obligated in 2008.12 Many of these commitments will be repaid by the borrowers; FCRA-required government-estimated subsidy rates indicate that these direct loans would cost under $0.3 billion, though this may be an underestimate (see Box 1 above). (These estimates exclude the “GSE MBS Purchases” program, which was listed in the 2009 FCS as a direct loan program. Subsidyscope discusses this housing-related program in the sections below.) These loans were distributed by three federal agencies through 15 programs. Although specific terms may differ from program to program, they generally enable lower income borrowers to finance the purchase or construction of homes at low interest rates or other favorable loan terms.

Nearly 70 percent ($2.9 billion) of the 2009 loan obligations was distributed through the U.S. Department of Agriculture’s Rural Housing Service (RHS). Initially targeted to farmers,13 the primary goal of RHS is to provide loans, grants and other financing for housing in rural areas.14 In 2009, RHS pursued these goals through 11 credit programs. The largest of these, known as the Section 502 Single-Family Housing program, provided $2.6 billion in direct loans in 2009—more than double the amount loaned in 2008. These below-market-interest-rate loans are available to low-income borrowers for the purposes of buying or repairing homes in rural areas.15

Other direct loan programs in 2009 were administered through the U.S. Department of Defense and the U.S. Department of Veterans Affairs (VA). These programs generally work to improve the housing choices available to active service members or veterans. For example, the Family Housing Improvement Fund aims to enhance the quality of military housing by making direct loans to developers for construction of on- or off-base housing.16 The largest defense housing program in 2009, the VA-administered Vendee Loans program, finances loans on foreclosed properties acquired by the VA through its other housing assistance programs.17 In 2009, this program obligated nearly $1 billion in direct loans, more than three times the amount obligated in 2008.

Table 1: Direct Loans in the Housing Sector (excluding Treasury purchases of GSE MBS), Fiscal Years 2008 and 2009

Program	Agency	2008 Subsidy Rate %	2008 Obligations ($ millions)	2009 Subsidy Rate %	2009 Obligations ($ millions)
Single-Family Housing Credit Sales	USDA - Rural Housing Service	-1.15	10	-2.59	10
Multi-Family Housing Credit Sales	USDA - Rural Housing Service	37.14	1	36.12	1
Section 502 Single-Family Housing	USDA - Rural Housing Service	9.37	1,166	6.72	2,646
Section 504 Housing Repair	USDA - Rural Housing Service	28.27	56	26.87	54
Section 515 Multi-Family Housing	USDA - Rural Housing Service	42.61	70	41.16	70
Section 523 Self-Help Housing	USDA - Rural Housing Service	2.84	5	1.65	5
Section 524 Site Development	USDA - Rural Housing Service	-0.79	5	-1.84	5
Section 514 Farm Labor Housing	USDA - Rural Housing Service	43.26	33	42.14	32
Multi-Family Housing Relending Demo	USDA - Rural Housing Service	46.39	14	44.98	15
Multi-Family Housing Revitalization Seconds	USDA - Rural Housing Service	N/A	N/A	85.51	4
Multi-Family Housing Revitalization Zero	USDA - Rural Housing Service	N/A	N/A	60.59	16
Family Housing Improvement Fund Direct Loans	Department of Defense - Family Housing	23.86	457	31.31	171
Acquired Loans	VA - Benefits Programs	8.84	69	3.04	81
Vendee Loans	VA - Benefits Programs	-1.59	268	-3.29	996
Native American Veteran Housing Loans	VA - Benefits Programs	-14.48	12	-10.07	15
Transitional Housing for Homeless Veterans	VA - Health Administration	......	......	N/A	N/A
Total Obligations			2,166		4,122

Source: Subsidyscope analysis of data from the Federal Credit Supplement (FCS). 2008 figures are from the FCS FY2009, Table 1; 2009 figures are from the FCS FY2010, Table 1.

Note:

This table excludes the “GSE MBS Purchases” program, which was listed in the FCS as a direct loan program. Subsidyscope discusses this housing-related program in the sections below. This table also excludes the “Energy Retrofit Loans” program, listed in the FCS under the Department of Housing and Urban Development. The program was deemed by Subsidyscope to be an energy-related program and is included in its analysis of the energy sector. In FY2009, the program reported $92 million in obligations, with an 89.82 percent subsidy rate.

Loan Guarantees: Government Backs $688 Billion in Mortgages (FY2009)

In 2009, the federal government committed $688 billion in loan guarantees through about 30 housing sector programs; this volume includes guarantees of securities backed by mortgages on single- and multi-family homes already carrying a federal guarantee.18 Many of these commitments will be repaid by the borrowers; FCRA-required government-estimated subsidy rates indicate these guarantees would generate over $1 billion in earnings for the government, though this may underestimate the cost to the government (see Box 1 above).

The volume committed in 2009 is nearly three times more than the nearly $230 billion committed in 2008 (see Table 2). The majority of this increase occurred in two programs: the Mutual Mortgage Insurance Program operated by the Federal Housing Administration (FHA), and Guarantees of Mortgage-backed Securities made through the Government National Mortgage Association (Ginnie Mae).

The FHA, an arm of the U.S. Department of Housing and Urban Development (HUD), administered nearly two dozen loan guarantee programs in 2009. Though each program is distinct, they share the primary function of insuring mortgages made by private lenders.19 By guaranteeing mortgages against default, FHA programs (like other loan guarantee programs) allow lenders to make riskier loans than they otherwise would. This, in turn, enables higher risk borrowers with fewer resources or limited credit history to obtain financing for housing.20

FHA programs issued a total of $321 billion of loan guarantees in 2009. The Mutual Mortgage Insurance Program is the largest, committing $285 billion in loan guarantees—nearly four times more than committed in 2008 (see Table 2 below). To qualify for this single-family mortgage insurance, a borrower must be purchasing a home with fewer than four housing units, within loan limits set by Congress.21 The borrower must also have a down payment of at least 3.5 percent and meet minimum credit requirements.22

In the years preceding the 2008 financial crisis, the demand for this type of insurance was steadily dropping—FHA’s market share of home purchase mortgages declined from 16 percent in 1995 to 3 percent in 2005 and 2006.23 Generally lower interest rates, the increasing availability of alternative mortgage products and rising home prices led homebuyers and lenders to other types of financing. In the wake of the financial crisis, tightened credit limited the availability of these alternatives, and FHA has again become a popular option for borrowers.24

Ginnie Mae has experienced similar growth in recent years—it has nearly quadrupled its volume of mortgage-backed securities (MBS) guarantees, from $77 billion in 2008 to $300 billion in 2009 (see Table 2 below). Ginnie Mae, a government-owned corporation within HUD, guarantees the MBS created from qualifying FHA, VA, and RHS loans.25 As the volume of loans guaranteed by these agencies has increased, so has the supply of Ginnie Mae guarantees. Moreover, Ginnie Mae MBS guarantees provide retail lenders with ready access to secondary financing markets, as both the securities themselves and the mortgages comprising them are backed by the full faith and credit of the federal government.26 This ability to easily package and sell government-guaranteed loans as mortgage-backed securities further enhances the popularity of programs like the FHA.27

Upheavals in the mortgage market starting in 2007 greatly increased losses on outstanding federal loan guarantees.28 For example, in 2009, FHA’s losses in its Mutual Mortgage Insurance (MMI) Fund reduced its reserve balance with the U.S. Department of the Treasury (Treasury) below the two percent minimum that it is statutorily mandated to maintain.29 The MMI Fund comprised 89 percent of FHA’s total insurance-in-force in 2009.30 Though the amount of outstanding loan guarantees issued by the Fund increased 54 percent between 2008 and 2009 (from $448 billion to $691 billion), the estimated future costs of those loan guarantees grew by 65 percent (from $17 billion to $28 billion).31 The reserve ratio of this Fund is not projected to exceed two percent again until 2013.32

Like FHA, many participants in the mortgage market have incurred significant risk and costs associated with mortgage defaults in recent years.33 In a 2008 report entitled Defaulting on the Dream, the Pew Center on the States noted that as of December 2007, 1.6 million loans were in foreclosure or 90 days past due—a 55 percent increase from a year earlier.34 The government has initiated several programs broadly intended to help homeowners keep their homes through loan modifications that, for example, reduce the interest rates or the principals on mortgages.35 Counseling and other loss mitigation programs are discussed further below.

Table 2: Loan Guarantees in the Housing Sector, Fiscal Years 2008 and 2009

Program	Agency	2008 Subsidy Rate %	2008 Commitments ($ millions)	2009 Subsidy Rate %	2009 Commitments ($ millions)
Guaranteed 502 Single Family Housing, Purchase	USDA - Rural Housing Service	1.20	5,730	1.27	18,416
Guaranteed 502, Refinance	USDA - Rural Housing Service	0.81	269	0.98	42
Guaranteed 538 Multi-Family Housing	USDA - Rural Housing Service	9.40	141	15.68	64
Indian Housing Loan Guarantees	HUD - Public and Indian Housing Programs	2.42	367	2.52	420
Title VI Indian Housing Guarantees	HUD - Public and Indian Housing Programs	12.12	17	12.34	17
Native Hawaiian Housing Loan Guarantees	HUD - Public and Indian Housing Programs	2.42	41	2.52	42
Community Development Loan Guarantees (Section 108)	HUD - Community Planning and Development	2.25	200	2.26	307
Multifamily Development	HUD - Housing Programs (FHA)	-0.83	900	-1.10	1,450
Section 221(d)(3) Cooperatives	HUD - Housing Programs (FHA)	5.67	10	5.84	10
Tax Credit New Construction	HUD - Housing Programs (FHA)	-3.20	700	-3.20	450
Section 238(c) Military Impact Area	HUD - Housing Programs (FHA)	N/A	N/A	-0.04	75
Apartment Refinance	HUD - Housing Programs (FHA)	-2.75	1,500	-3.29	1,350
Section 241 Supplemental Loans	HUD - Housing Programs (FHA)	2.99	10	1.97	8
Multifamily Operating Loss Loans	HUD - Housing Programs (FHA)	15.43	15	22.18	12
Housing Finance Authority Risk Sharing	HUD - Housing Programs (FHA)	-1.25	120	-1.17	180
GSE Risk Sharing	HUD - Housing Programs (FHA)	-1.42	15	-1.43	5
Health Care and Nursing Homes	HUD - Housing Programs (FHA)	-0.68	500	-0.74	275
Health Care Refinance	HUD - Housing Programs (FHA)	-1.58	1,150	-2.09	1,600
Other Rental	HUD - Housing Programs (FHA)	-1.82	15	-2.14	40
Section 234 Condominiums1	HUD - Housing Programs (FHA)	-0.88	3,657	N/A	N/A
Section 203(k) Rehabilitation Mortgage	HUD - Housing Programs (FHA)	1.89	538	N/A	N/A
Home Equity Conversion Mortgages1	HUD - Housing Programs (FHA)	-1.90	28,990	N/A	N/A
Title I Property Improvement	HUD - Housing Programs (FHA)	0.52	54	-0.52	54
Title I Manufactured Housing	HUD - Housing Programs (FHA)	0.13	71	-0.14	71
Mutual Mortgage Insurance Program	HUD - Housing Programs (FHA)	-0.51	72,172	-0.04	285,000
Mutual Mortgage Insurance Program—HECM (Legislative Proposal in 2008)	HUD - Housing Programs (FHA)	......	......	-1.37	30,000
Mutual Mortgage Insurance Program—Seller Financed Down Payment Assistance	HUD - Housing Programs (FHA)	......	......	6.35	......
HOPE for Homeowners Loan Guarantees	HUD - Housing Programs (FHA)	N/A	N/A	13.38	......
HOPE for Homeowners Loan Guarantees (Legislative Proposal in 2009)	HUD - Housing Programs (FHA)	N/A	N/A	23.27	900
Guarantees of Mortgage-Backed Securities	HUD - Government National Mortgage Association (Ginnie Mae)	-0.21	77,400	-0.21	300,0002
Guarantees of Mortgage-Backed Securities - HOPE for Homeowners	HUD - Government National Mortgage Association (Ginnie Mae)	N/A	N/A	-0.21	9002
Housing Guaranteed Loans	VA - Benefits Programs	-0.37	34,761	-0.66	45,346
Guaranteed Loan Sale Securities	VA - Benefits Programs	2.14	436	2.19	993
Total Commitments			229,781		688,0262

Source: Subsidyscope analysis of data from the Federal Credit Supplement (FCS). 2008 figures are from the FCS FY2009, Table 2; 2009 figures are from the FCS FY2010, Table 2.

1. The FHA Modernization Act of 2008 amends some aspects of the FHA. Among other provisions, it moved the Section 234 Condominium and Home Equity Conversion Mortgages programs into the Mutual Mortgage Insurance fund. See the 2009 FHA Annual Management Report (page 7) and the CRS summary of the FHA Modernization Act of 2008 (page 4) for more information.
2. The Government National Mortgage Association (Ginnie Mae) provides guarantees for mortgage-backed securities which usually contain loans already guaranteed through other federal programs such as the FHA and VA.

Fannie, Freddie and Others Play Large Role in Mortgage Markets

In addition to providing loans on below-market terms through its loan and loan guarantee programs, the government devotes significant resources to facilitating liquidity in the mortgage market.36 Companies known as ‘government-sponsored enterprises’ (GSEs) operate under government charter to assure an active and deep market for home mortgages.37

The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), now operating under federal conservatorship, both purchase and guarantee MBS.38 They also invest in MBS issued by themselves and others, as well as individual mortgages. The Federal Home Loan Banks System (FHLB) borrows money which it subsequently lends to banks and other institutions that issue mortgage loans.39

The missions of all three GSEs include the promotion of affordable housing in addition to their housing finance and liquidity goals.40 The Congressional Research Service (CRS) notes that “these institutions are widely credited with lowering the cost of home mortgages.”41 They are also among the largest financial institutions in the U.S.42 According to the Office of Management and Budget, “together these three GSEs currently are involved, in one form or another, with more than one half of the $11 trillion residential mortgages outstanding in the U.S. today [2010], not including indirect investments through advances of the FHLBs.”43

Though privately owned, they receive the benefit of many privileges through their status as GSEs, some of which may result in subsidies to the housing sector.44 According to the Congressional Budget Office (CBO), the federal charters of Fannie Mae and Freddie Mac “have allowed the two entities to borrow at interest rates lower than those paid by comparable finance companies…. The lower borrowing costs enjoyed by the two entities flowed to participants in the housing market in the form of lower mortgage rates and to the entities’ stockholders in the form of higher profits.”45

The financial crisis proved to be catastrophic to the GSEs, particularly Fannie Mae and Freddie Mac. Both were taken into government conservatorship under authority granted in the 2008 Housing Economic and Recovery Act (discussed further in the following section).46 The cost of Fannie and Freddie became more apparent when the government seized the companies in 2008 and put them in conservatorship. This and other federal actions intended to stabilize U.S. mortgage and financial markets are discussed further below.

Housing Fallout Leads to Government Bailout

The high level of government support for housing rose as a result of the 2008 financial crisis. As the prices of homes declined in 2007, Congress and the Federal Reserve began to adopt a series of policies designed to minimize the resulting losses to homebuyers, banks and the financial system as a whole.47 Below, Subsidyscope describes several of the actions related to risk transfers that were undertaken in the wake of the crisis. For a more exhaustive look at these actions, please see HUD’s “Report to Congress on the Root Causes of the Foreclosure Crisis.”

In July 2008, Congress enacted the Housing and Economic Recovery Act (HERA).48 This Act, as noted by CRS, “is likely to affect most owner-occupied housing in the United States through a variety of channels.”49 In response to the eroding financial conditions of Fannie Mae and Freddie Mac and their roles in maintaining a functioning mortgage market, HERA reorganized and strengthened the regulation of the GSEs.50 HERA also authorized the Treasury to provide assistance to the GSEs and other financial institutions in order to stabilize financial and credit markets, as well as the overall economy.51

Under this authority, Treasury began to lend directly to Fannie Mae and Freddie Mac through purchases of senior preferred stock. These investments, for which Treasury receives dividend payments, were intended to ensure that each GSE maintained a positive net worth.52 The Federal Housing Finance Agency (FHFA), a regulatory agency created by HERA to oversee the GSEs, reported that the GSEs received a net $93 billion in fiscal year 2009, (for a net total of $135 billion through June 2010).53 The net cumulative investment in Fannie Mae and Freddie Mac is projected by the FHFA to grow by an additional $6 to $124 billion through 2013.54

Other government agencies have also estimated the costs on the liabilities of Fannie Mae and Freddie Mac. Like FHFA, the Office of Management and Budget (OMB) reports the preferred stock purchase agreements made by Treasury; OMB counts this cash flow as an outlay to a non-governmental entity.55 In contrast, CBO treats Fannie and Freddie as governmental entities.56 CBO estimated that on a fair value basis the liabilities of these two GSEs cost the government $291 billion in fiscal year 2009.57 For more information, see Box 2.

The Treasury also began making purchases of MBS issued by the Fannie Mae and Freddie Mac.58 The FHFA reported that these purchases totaled $189 billion during fiscal year 2009.59 In addition, Treasury also established a short-term line of credit under the Act, which neither enterprise had used by the time its authority expired in December 2009.60

CBO notes that the aid given to Fannie Mae and Freddie Mac under conservatorship enabled them to continue operating when private financial institutions were struggling. In 2009, the two GSEs financed about 75 percent of new mortgages originated in that year. If loans insured by agencies like the FHA also are included, the CBO reports that "more than 90 percent of new mortgages made in 2009 carried a federal guarantee."61

In addition to the Treasury's activities, the Federal Reserve announced that it would purchase up to $1.25 trillion of MBS guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae.62 The purchase program also extended to the FHLB.63 The Federal Reserve noted that “the goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.”64 As of October 2010, the Federal Reserve had purchased all but $2.9 billion of the amount to which it committed.65

Analyzing actions such as those taken by the Federal Reserve in response to the financial crisis presents challenges: many of them were intended to stabilize not only the housing market, but the economy as a whole. This makes it difficult to analyze the extent to which some actions contain subsidies specific to the housing sector. Subsidyscope presents these activities in order to illustrate the government's role in this sector; these estimates should be used with caution as it may take several years to determine how much subsidy they will ultimately convey.

While the government worked to stabilize the mortgage credit markets, it also created programs to help prevent individual homeowners from defaulting. For instance, the HOPE for Homeowners program, listed as a loan guarantee program in Table 2 above, authorizes the FHA to guarantee up to $300 billion in loans intended to replace mortgages with interest rates too high for the borrowers to service.66 Although the program initially struggled to attract participants (CRS reports that it closed only 50 new mortgages in its first 9 months),67 the program has since been modified and it guaranteed $900 million in mortgages in 2009.68 A report from HUD and the Treasury on a selection of other foreclosure programs estimated that they began 3.5 million modification arrangements between April 2009 and August 2010.69

In addition to the risk transfers described above, HERA enacted many other provisions intended to support housing-related activities, some of which are described elsewhere on Subsidyscope’s web site. For example, the Act established a tax credit for first-time homebuyers originally worth up to $7,500, described in more detail on Subsidyscope’s tax subsidy page.70 The Neighborhood Stabilization Program provides funding to state and local governments for the redevelopment of foreclosed or abandoned homes.71

1. Subsidyscope analysis of data from the Federal Credit Supplement (FCS) Fiscal Year (FY) 2010.
2. Subsidyscope analysis of data from the FHFA. This amount nets out dividend payments made to Treasury totaling $4 billion (for a gross of $97 billion) in fiscal year 2009. See: Table 1: Quarterly Draws on Treasury Commitments to Fannie Mae and Freddie Mac per the Senior Preferred Stock Purchase Agreements and Table 2: Dividends on Enterprise Draws from Treasury in "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities."
3. Congressional Budget Office (CBO). "Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market." December 2010. p. 4. In CBO's update to "The Budget and Economic Outlook: Fiscal Years 2010 to 2020," the fiscal year 2009 outlays related to Fannie Mae and Freddie Mac reflect cash transfers from Treasury to the GSEs (rather than the subsidy cost of their guarantees adjusted for market risk). For more information, see: CBO. "The Budget and Economic Outlook: An Update." August 2010. pp. 18-19.
4. Subsidyscope analysis of data from the Office of Management and Budget (OMB) and the FHFA. see: OMB. "Analytical Perspectives Fiscal Year 2011"; and FHFA. "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities." Tables 3, 4 and 5.
5. CBO. "Assessing the Government’s Costs for Mortgage Insurance Provided by the Federal Housing Administration." July 19, 2006. p. 4.
6. Ibid., p. 1.
7. CBO. "Subsidy Estimates for Direct and Guaranteed Student Loans." November 2005. p. 9. For more information on the calculation of subsidies under the Federal Credit Reform Act of 1990, see p. 10, Box 2.
8. Subsidyscope analysis of data from the FCS FY2009 and FY2010. Tables 1 and 2.
9. According to a 2007 letter to the U.S. House of Representatives, CBO notes that "the subsidy scosts translate to between 2 percent and 5 percent of the amount of the insured mortgages. If FHA insures $60 billion in new single-family mortgages each year, a subsidy rates of 3.5 percent would mean that the cost of the program is about $2 billion annually." See: CBO. "Assessing the Government’s Costs for Mortgage Insurance Provided by the Federal Housing Administration." July 19, 2006. p. 8.
10. See our page on data quality for a description of some of the errors Subsidyscope has found in federal data.
11. For an example of other budget documents with loan and loan guarantee estimates, see: OMB. "Analytical Perspectives Fiscal Year 2011." pp. 364-375.
12. Subsidyscope analysis of data from the FCS FY2009 and FY2010. Tables 1 and 2.
13. Another government-sponsored enterprise (GSE), Farmer Mac, was established within the Farm Credit System in 1988 to enhance credit for the agricultural sector and rural areas in general. It was expanded in 1996 to not only guarantee securities backed by loans pools, but to also directly purchase mortgages. According to the OMB, Farmer Mac's total activity as of September 30, 2009 was $10.8 billion—a 10 percent increase from the previous year. See OMB. "Analytical Perspectives Fiscal Year 2011." pp. 356-357.
14. Foote, Bruce E. Congressional Research Service (CRS). "USDA Rural Housing Programs: An Overview." May 11, 2006. p. 1.
15. Foote, Bruce E. CRS. "USDA Rural Housing Programs: An Overview." May 11, 2006. pp. 2-3.
16. Government Accounting Office (GAO). "Military Housing[:] Privatization Off to a Slow Start and Continued Management Attention Needed." July 1998. p. 17.
17. GAO. "Whether a Department of Veterans Affairs Memorandum is a Rule Under the Congressional Review Act." May 19, 2003.
18. Subsidyscope analysis of data from the FCS FY2009 and FY2010. Tables 1 and 2.
19. Maggie McCarty et al. CRS. "Overview of Federal Housing Assistance Programs and Policy." July 22, 2008. p. 20.
20. OMB. "Analytical Perspectives Fiscal Year 2011." p. 346.
21. Federal Housing Administration (FHA). "Annual Management Report Fiscal Year 2009." pp. 5-7; and GAO. "Federal Housing Administration Decline in the Agency's Market Share was Associated with Product and Process Developments of Other Mortgage Market Participants." June 2007. p. 7.
22. U.S. Department of Housing and Urban Development (HUD). "203(b) Mortgage Insurance." Last Updated: February 16, 2010; and HUD. "Let FHA Loans Help You." Last Updated: July 16, 2009.
23. GAO. "Federal Housing Administration Decline in the Agency's Market Share was Associated with Product and Process Developments of Other Mortgage Market Participants." June 2007. p. 4; and Foote, Bruce E. CRS. "The FHA Modernization Act of 2008." February 25, 2009. p. 2.
24. OMB. "Analytical Perspectives Fiscal Year 2011." p. 346.
25. Government National Mortgage Association (Ginnie Mae). "About Ginnie Mae."
26. OMB. "Analytical Perspectives Fiscal Year 2011." pp. 346-347.
27. Ibid., p. 346.
28. Ibid., pp. 346-347.
29. Ibid., p. 347.
30. FHA. "Annual Management Report Fiscal Year 2009." p. 6.
31. OMB. "Analytical Perspectives Fiscal Year 2011." p. 364.
32. Ibid., p. 347.
33. Ibid.
34. Pew Charitable Trusts. "Defaulting on the Dream[:] States Respond to America's Foreclosure Crisis." April 2008. p. 4.
35. Webel, Baird and Murphy, Edward V. CRS. "The Emergency Economic Stabilization Act and Current Financial Turmoil: Issues and Analysis." pp. 4-5.
36. OMB. "Analytical Perspectives Fiscal Year 2011." p. 346.
37. Ibid., p. 349.
38. OMB. "Analytical Perspectives Fiscal Year 2011." pp. 349-350; and CBO. "The Budget and Economic Outlook: An Update." August 2010. p. 69.
39. OMB. "Analytical Perspectives Fiscal Year 2011." p. 349.
40. Ibid., pp. 349-350.
41. Kosar, Kevin R. CRS. "Government-Sponsored Enterprises (GSEs): An Institutional Overview." January 28, 2009. p. 4.
42. Ibid., p. 5.
43. OMB. "Analytical Perspectives Fiscal Year 2011." p. 349.
44. Kosar, Kevin R. CRS. "Government-Sponsored Enterprises (GSEs): An Institutional Overview." January 28, 2009. p. 4; and Slivinski, Stephen. "House Bias: The Economic Consequences of Subsidizing Homeownership." Fall 2008. p. 14.
45. CBO. "CBO's Budgetary Treatment of Fannie Mae and Freddie Mac." January 2010. p. 4.
46. OMB. "Analytical Perspectives Fiscal Year 2011." p. 350.
47. OMB. "Analytical Perspectives Fiscal Year 2010." p. 60.
48. N. Eric Weiss et al. CRS. "Housing and Economic Recovery Act of 2008." August 19, 2008. p. 19.
49. Ibid., p. Summary.
50. Ibid., p. 1.
51. OMB. "Analytical Perspectives Fiscal Year 2011." p. 350.
52. Ibid.
53. Subsidyscope analysis of data from the FHFA. These amounts net out dividend payments made to Treasury totaling $4 billion (for a gross of $97 billion) in fiscal year 2009 and $12.8 billion (for a gross of $148 billion) through June 2010. See: Table 1: Quarterly Draws on Treasury Commitments to Fannie Mae and Freddie Mac per the Senior Preferred Stock Purchase Agreements and Table 2: Dividends on Enterprise Draws from Treasury in "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities."
54. Subsidyscope analysis of data from the FHFA. These amounts net out additional dividend payments projected to be made to Treasury totaling between $67 and $91 billion (for a gross between $73 and $215 billion) through 2013. See: "FHFA Releases Projections Showing Range of Potential Draws for Fannie Mae and Freddie Mac." October 21, 2010. p. 10. CBO and Treasury also estimate the projected cost of preferred stock purchases or "cash infusions." See CBO. "CBO's Budgetary Treatment of Fannie Mae and Freddie Mac." January 2010. p. 13.
55. CBO. "CBO's Budgetary Treatment of Fannie Mae and Freddie Mac." January 2010. p. 13.
56. Ibid., pp. 2-3.
57. CBO. "Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market." December 2010. p. 4. In CBO's update to "The Budget and Economic Outlook: Fiscal Years 2010 to 2020," the fiscal year 2009 outlays related to Fannie Mae and Freddie Mac reflect cash transfers from Treasury to the GSEs (rather than the subsidy cost of their guarantees adjusted for market risk). For more information, see: CBO. "The Budget and Economic Outlook: An Update." August 2010. pp. 18-19.
58. OMB. "Analytical Perspectives Fiscal Year 2011." p. 350.
59. Subsidyscope analysis of data from the FHFA. See: Table 3: Treasury Purchases of GSE MBS in "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities."
60. OMB. "Analytical Perspectives Fiscal Year 2011." p. 351.
61. CBO. "Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market." December 2010. pp. VIII-IX.
62. FHFA. "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities." p. 1.
63. FHFA. "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities." Table 5: Federal Reserve Purchases of GSE Debt.
64. Federal Reserve Bank (FRB) of New York. "FAQs: MBS Purchase Program." Last Updated: June 28, 2010.
65. On November 4, 2009, the Federal Reserve lowered its target level of purchases of GSE debt to $175 billion from $200 billion. See: FHFA. "Data as of October 1, 2010 on Treasury and Federal Reserve Purchase Programs for GSE and Mortgage Related-Securities." Table 5: Federal Reserve Purchases of GSE Debt.
66. N. Eric Weiss et al. CRS. "Housing and Economic Recovery Act of 2008." August 19, 2008. p. Summary.
67. Jones, Katie. CRS. "Preserving Homeownership: Foreclosure Prevention Initiatives." pp. 12-14.
68. OMB. "Federal Credit Supplement Fiscal Year 2010." Table 2 Loan Guarantees: Subsidy Rates, Commitments, and Average Loan Size.
69. This estimate includes trial modifications that have not yet been made permanent. See: HUD and U.S. Department of the Treasury. "The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners." October 2010. p. 1.
70. Internal Revenue Service (IRS). "First-Time Homebuyer Credit." Last Updated: September 9, 2010.
71. HUD. "Neighborhood Stabilization Program Grants." Last Updated: November 1, 2010.
72. CBO. "CBO's Budgetary Treatment of Fannie Mae and Freddie Mac." January 2010. pp. 2-3.
73. CBO. "Fannie Mae, Freddie Mac, and the Federal Role in the Secondary Mortgage Market." December 2010. p. 4. In CBO's update to "The Budget and Economic Outlook: Fiscal Years 2010 to 2020," the fiscal year 2009 outlays related to Fannie Mae and Freddie Mac reflect cash transfers from Treasury to the GSEs (rather than the subsidy cost of their guarantees adjusted for market risk). For more information, see: CBO. "The Budget and Economic Outlook: An Update." August 2010. pp. 18-19.
74. CBO. "CBO's Budgetary Treatment of Fannie Mae and Freddie Mac." January 2010. pp. 2-3.
75. Ibid., p. 13.
76. Ibid.
77. Ibid., p. 14.
78. CBO. "The Budget and Economic Outlook: An Update.." August 2010. pp. 18-19, footnote "f."

Last updated March 30, 2011.