The Troubled Asset Relief Program (TARP) -- the $700bn federal bailout of Wall Street firms and subsidization of Main Street mortgage modifications -- is not only projected to cost less than original forecasts, but recently passed a program milestone. The volume of funds repaid into TARP from financial firms that received capital boosts now exceeds the volume of funds outstanding, the US Treasury Department said in its May report to Congress (download here). Treasury noted in the April update on TARP that it expects to spend less than $550bn of the $700bn authorized for the program, and expects to recover all but $117bn -- an estimate that was subsequently revised to $105.4bn. Of $384bn in total TARP disbursements, more than half -- or $194bn -- was repaid through May, leaving only $190bn outstanding. The sale of 1.5bn shares of Citigroup (C) pushed the repayments past outstandings for the first time in TARP's history. "TARP repayments have continued to exceed expectations, substantially reducing the projected cost of this program to taxpayers," said Herb Allison, Treasury assistant secretary for financial stability, in a statement. "This milestone is further evidence that TARP is achieving its intended objectives: stabilizing our financial system and laying the groundwork for economic recovery." The Citigroup shares sale yielded $6.18bn of gross proceeds to taxpayers. Taxpayers so far received $23bn of dividends, interest and other income. Combined TARP revenues -- including repayments and other income -- totaled $217bn through the end of May. TARP also provides $50bn of funding for the Home Affordable Modification Program, or HAMP. Through April 2010, nearly 300,000 trial HAMP mods had become permanent, with borrowers experiencing median monthly payment reductions of 36%. Write to Diana Golobay. Disclosure: the author holds no relevant investments.