Matt Levine, Columnist

Fannie and Freddie Will Be Profitable After Their Next Bailouts, Too

Nationalizing the mortgage market has been weird but lucrative.

August 8, 2016 at 9:23 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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The Federal Housing Finance Agency released the results of the annual stress tests for Fannie Mae and Freddie Mac on Monday, and the report is a nice little milestone. For the first time, the crisis-era government bailouts of the government-sponsored entities, combined with their hypothetical future bailouts, are profitable for the government. Here's the accounting1470678254755:

The government put $187.5 billion into Fannie and Freddie. It has gotten back $246.7 billion, so it's up $59.2 billion. In the "severely adverse scenario" of the Dodd-Frank stress tests, it will have to put in another $49.2 billion. That will still leave it with a cool $10 billion in profit.