Rep. Jeb Hensarling (R-Texas) re-introduced legislation late Thursday that would end the bailouts of Fannie Mae and Freddie Mac and end their conservatorship in two years. So far, the government-sponsored enterprises have pulled $131 billion from the Treasury Department. According to President Obama’s budget, the bailout of these two firms will ultimately cost taxpayers $73 billion after dividend repayments by the end of 2021. In February, the Treasury released its white paper on the future of housing finance, detailing three possible options Congress could take in winding down these two firms that have supported the mortgage markets for decades. “It’s time to enact fundamental reform of Fannie and Freddie before these companies go from ‘too big to fail’ to ‘too late to fix,’” Hensarling said in a statement released Thursday. Hensarling originally introduced the bill in 2008, then again in 2010 as an amendment to the Dodd-Frank Act. In early March, Treasury Secretary Timothy Geithner too urged lawmakers to reform Fannie and Freddie within the next two years. The GSE Bailout Elimination and Taxpayer Protection Act would immediately implement several reforms. It would repeal the GSE’s affordable housing goals and would cap their maximum mortgage portfolio size at $700 billion. That cap would gradually come down to $250 billion over five years. The bill would also reduce the GSEs’ market share by returning the conforming loan limit to $417,000, and it would increase fees they charge for guaranteeing its securities, or G-Fees, to bring more competitive private capital to the market. Once conservatorship ends for the Fannie and Freddie, their regulator the Federal Housing Finance Agency would evaluate the financial status of each company and place them into receivership if necessary. If not, the GSEs would be allowed to resume their “limited market operations” for a maximum of three years under certain rules. According to the bill, during these three years, the minimum down payment would be at least 5% for all new loans. That would increase to 7.5% in the second year and 10% by the third year. The bill would also remove their exemption from paying state and local taxes and would force the companies to register their securities with the Securities and Exchange Commission. After the end of that three-year period, each GSE’s charter expires, according to the bill. “At that point, Fannie and Freddie must conduct all new operations as fully private sector companies competing on a level playing field without any government advantages,” according to Hensarling. The bill also provides for a wind down of any legacy business commitments after the charters expire over the next 10 years. “Our goal is to help homebuyers stay homeowners, and free taxpayers of the burden that comes when homes get sold to buyers who simply can’t afford them,” Hensarling said. “It’s my hope that President Obama will work with us to pursue a path that will protect taxpayers, end the billions of dollars in bailouts, and bring certainty back to the mortgage market.” Write to Jon Prior. Follow him on Twitter @JonAPrior.