Mortgage giant Fannie Mae says it had net income of $1.9 billion for the first quarter. That's sharply down from the same period a year ago due to lower fee income and larger losses on investments used to hedge against swings in interest rates.
The results announced Thursday for the January-through-March period marked the 13th straight profitable quarter for the government-controlled company.
Washington-based Fannie also says it will pay a dividend of $1.8 billion to the U.S. Treasury next month. Fannie will then have paid $138.2 billion in dividends, exceeding the $116 billion it received from taxpayers during the financial crisis.
The government rescued Fannie and smaller sibling Freddie Mac at the height of the crisis in September 2008.
Fannie and Freddie together own or guarantee about half of all U.S. mortgages, worth about $5 trillion. Along with other federal agencies, they back roughly 90 percent of new home loans.
The two companies don't directly make loans to borrowers. They buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. That helps make home loans available.
The decline in long-term interest rates has brought losses on derivatives, financial transactions Fannie Mae uses to hedge against rate swings.
Long-term interest rates fell in the first quarter after a winter in which economic growth slowed sharply and the Federal Reserve downgraded its view of the economy, offering no sign that a rate increase might be coming soon.
A plan to phase out Fannie and Freddie and instead use mainly private insurers to backstop home loans advanced in the Senate last year and was endorsed by the Obama White House. The plan would create a new government insurance fund. Investors would pay fees in exchange for insurance on mortgage securities they buy, and the government would become a last-resort loan guarantor.
No work on the proposal has been done this year in the current Congress, in which Republicans control both the House and Senate as a result of the November elections.