Fannie Mae and Freddie Mac would be obligated to pay $6.4 billion into an affordable housing fund over 10 years under a GSE regulatory reform bill passed by a House panel in May, according to a Congressional Budget Office cost estimate.The CBO based the estimate on the assumption that the two government-sponsored enterprises will continue to experience profit growth, and their combined after-tax profits have averaged $10 billion over the past five years. The bill (H.R. 1461) mandates that the GSEs contribute 3.5% of their after-tax profits to the affordable housing fund in 2006 and 5% in 2007 and succeeding years. The first AH fund assessment would total $360 million in 2006, the CBO estimates. "Over the 2006-2015 period, assessments would total an estimated $6.4 billion," the CBO says. As previously reported, the CBO has concluded that Fannie and Freddie could deduct these assessments from their taxes. To cover this revenue loss, House Financial Services Committee Chairman Michael Oxley, R-Ohio, has proposed to use 25% of the AH fund to pay the interest on old savings-and-loan bailout (Refcorp) bonds.

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