Democrats and Republicans are staking out their positions on the looming battle with the House GOP suggested that more spending cuts and the promise of tax reform be tied to an increase of the debt, which stands at around $16.4 trillion.
Fannie accepted about $116 billion in taxpayer funds since the government took over the agency during the 2008 financial crisis to keep it afloat.
With this payment, Fannie has now paid back $95 billion of that loan, narrowing the cost of its bailout to $21.1 billion.
Although the dividends, technically, do not reduce the cash infusion from the Treasury, both agencies have paid upward of 80 percent of the $188 billion investment, so far.
Fannie earned a record $58.7 billion in the January to March quarter because of a one-time tax adjustment — a partial write off from losses incurred from bad mortgages over the years — which lowered its tax liability and helped boost its profit to a record $8.1 billion
The improvement also came on the improving housing market — an increase in home prices, including higher average sales prices on Fannie Mae-owned properties, a decline in the number of delinquent loans and the company’s $3.6 billion resolution agreement with Bank of America.
The agency has funded the mortgage market with approximately $3.5 trillion in liquidity since 2009.
Despite the improvement, Fannie CEO Tim Mayopoulos has said Congress still needs to take action to reduce the role of Fannie and Freddie in the mortgage finance market.
Senate Republicans such as Sens. Bob Corker (R-Tenn.) and Mike Crapo (R-Idaho) are pushing for a plan before the Senate would be willing to take up the nomination of Rep. Mel Watt (D-N.C.) to lead the Federal Housing Finance Agency (FHFA), the federal regulator that oversees the two government-controlled agencies.
The banking and mortgage industries have said they hope the nomination accelerates policymakers' willingness to sit down and negotiate a plan forward.
The Obama administration proposed a plan in 2011, but there hasn't been much movement forward since then despite the calls for a proposal.
FHFA acting Director Edward DeMarco has put most of the onus on Congress to craft the legislation that he says would help him and his agency bolster the already improving housing market.
Overall, Fannie and Freddie own or guarantee about half of U.S. mortgages worth $5 trillion.