The Troubled Asset Relief Program, which launched more than four years ago to stabilize both banks and the mortgage finance market, is costing the federal government less than initially expected.
The Congressional Budget Office says TARP’s subsidy cost to the government – including grants for mortgage aid initiatives – currently stands at $21 billion, down $3 billion from the last estimate of $24 billion.
The CBO says as of April 17, 2013, $428 billion of the authorized $700 billion in TARP funds were distributed through the program. This distribution includes $419 billion in already disbursed funds and $9 billion in projected expenditures.
The budget oversight office also analyzed how much support was provided to government mortgage programs.
The government committed $75 billion for the Home Affordable Modification Program early on, the CBO said. Of that amount, $50 billion was offered through TARP and $25 billion through Fannie Mae and Freddie Mac.
HAMP, to date, has helped 1.1 million homeowners receive a permanent loan modification, despite the fact that 300,000 of those mods later landed in default, CBO says.
The Treasury reallocated $8 billion of the $50 billion in funds allocated to housing agencies to state housing finance groups. Another $8 billion went to Federal Housing Administration programs.