First time Fannie won't need taxpayer funds

U.S. mortgage giant Fannie Mae has reported a first-quarter profit. And for the first time since it was seized by the government during the 2008 financial crisis, it will not need a quarterly infusion of taxpayer money.

Fannie said Wednesday that it earned net income attributable to common stockholders of $2.7 billion in the January-March quarter. Instead of seeking additional aid from taxpayers, the company will pay a dividend of $2.8 billion to the Treasury Department.

That compares with a net loss of $6.5 billion reported by Fannie for the same quarter a year ago.

The company was able to report the gain mostly because it had lower expenses for its losses. Two key reasons for that: Home price declines have slowed, and fewer mortgages are in serious delinquency.

The gain also adds to evidence of slow improvement in the home market five years after the housing bubble burst.

January and February made up the best winter for sales of previously occupied homes in five years. Builders are laying plans to construct more homes in 2012 than at any other point in past 31/2 years. Mortgage rates have never been cheaper. And while home prices continue to fall, most cities have reported smaller annual declines than in previous months.

Fannie has received about $116 billion so far from the Treasury Department, the most expensive bailout of a single company. So far, Fannie has repaid about $23 billion of that bailout.

The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover losses on soured mortgage loans.

Taxpayers have spent roughly $170 billion to rescue Fannie and Freddie. It could cost roughly $260 billion more to support the companies through 2014 after subtracting dividend payments, according to the government.