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According to 24/7 Wall Street, there was quite a bit positive press heard from the U.S. Treasury, after determing that TARP might “only” cost $30 billion, following subsequent investment returns on holdings of AIG, GM, Chrysler etc.

Freddie Mac and Fannie Mae are not part of the TARP program. However, the cost associated with bailing them out could be nearly ten times as much as the cost of TARP. Viewed another way, the salvation of Fannie and Freddie could be as much as half of the entire $787 billion Obama stimulus package.

Like all well-run businesses, the federal government has a worst, best, and middle case for the cost to bail out Freddie Mac and Fannie Mae. The range is from $221 billion to $363 billion, according to the Federal Housing Finance Agency (FHFA), which oversees both entities. [Nearly $150 billion been withdrawn already.]

Douglas A. McIntyre (October 28, 2010)

The 24/7 WallSt loss projection covers the period from 2008 to 2013. The major difference between the high ($363 billion) and low ($221 billion) scenarios is the hope that housing prices will rebound bringing some positive cash flow to Freddie Mac and Fannie Mae. 

The government has little choice in rescuing Freddie Mac and Fannie Mae. They hold, or are backers of, over half the mortgages in the U.S. In fact, I can think of only one other comparable entity that is not affiliated with them: the VHA. Without government support, the U.S. housing market would collapse in an even more chaotic and disruptive way than it did in 2008.