By MARCY GORDON, AP Business Writer
WASHINGTON -- U.S. mortgage giant Fannie Mae says it made money in the first three months of the year and is not seeking additional federal aid. It's the first time the company has reported a net income gain since it was taken over by the government during the 2008 financial crisis.
Fannie on Wednesday reported that it earned net income attributable to common stockholders of $2.7 billion in the January-March quarter. That compares with a net loss of $6.5 billion in the first quarter of 2011.
The company says the improvement was due primarily to slower home price declines, reduced inventory of single-family homes and fewer mortgages in serious delinquency.
An income gain for the company that required the biggest bailout of the 2008 financial crisis is the latest evidence that the depressed housing market may be slowly starting to recover five years after the housing bubble burst.
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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 3½ years. Mortgage rates have never been cheaper. And while home prices continue to fall, most cities are reporting smaller annual declines than in previous months.
Fannie has received about $116 billion so far from the Treasury Department.
The government rescued Fannie and sibling company Freddie Mac in September 2008 to cover losses on soured mortgage loans. Since then, a federal regulator -- the Federal Housing Finance Agency -- has controlled their financial decisions.
Taxpayers have spent roughly $170 billion to rescue Fannie and Freddie, the costliest bailout of the 2008 financial crisis. It could cost roughly $260 billion more to support the companies through 2014 after subtracting dividend payments, according to the government.
Last week, Freddie said it was requesting $19 million in additional federal aid after posting a net loss attributable to common stockholders of $1.2 billion for the January-March quarter. That compared with a net loss of $929 million in the same quarter of 2011.
While it was the first time Fannie hasn't requested money since the crisis, Freddie has had a few quarters when it did not seek government aid. Freddie requested $19 million for the January-March period, a relatively small request compared to previous quarters.
Fannie and McLean, Va.-based Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans, which are worth more than $5 trillion. Along with several federal agencies, they backed nearly 90% of new mortgages over the past year.
Fannie and Freddie buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world.