The Federal Housing Finance Agency on Thursday confirmed that it had reached an agreement with the Treasury Department to allow the government-sponsored mortgage enterprises it regulates, Fannie Mae and Freddie Mac , to retain $3 billion in capital. The two companies were slated to reduce their capital buffers to zero, under a 2012 directive from Congress. FHFA director Mel Watt noted that the tax reform measures that just passed Congress would have caused the companies to require a draw from Treasury, because the value of deferred tax assets on their balance sheets would have declined so drastically. But, Watt said, “FHFA considers the $3 billion capital reserve sufficient to cover other fluctuations in income in the normal course of each Enterprise’s business.”
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