Taxpayer aid to Fannie Mae and Freddie Mac will reach $224 billion by the end of 2012, of which $55 billion will be returned in dividends to the U.S. Treasury, according to President Barack Obama's 2012 budget, an article by Lorraine Woellert in yesterday's edition of Bloomberg News said.

By 2013, the government-owned mortgage companies will be profitable enough to "pay part, but not all" of their dividend payments from earnings, according to the budget that was released yesterday, the article said.

The budget's projected cost to taxpayers for rescuing Fannie Mae and Freddie Mac - $169 billion after subtracting the dividends - is at the low end of a range of estimates from the Federal Housing Finance Agency, the companies' chief regulator, the article said.

To date, the companies have cost the Treasury $130 billion, drawing about $151 billion in aid and paying back $20.2 billion in dividends.

The Treasury took Fannie Mae and Freddie Mac, which now own or guarantee more than half of U.S. residential mortgage debt, under conservatorship in 2008, promising unlimited aid to counter the companies' losses linked to subprime mortgages. In return, the article continued, the government received nearly 80 percent of the companies' preferred shares which accrue dividends of 10 percent a year, payable to the Treasury.

The federal budget doesn't account for the companies' debt and obligations, which total $5.3 trillion, more than the government's $3.7 trillion budget for 2012. The government- sponsored enterprises aren't considered federal agencies, according to the budget, which reiterates several goals set out by the administration on Friday, when it offered a set of options for dialing down government support for the nearly $11 trillion mortgage market.

In their report to Congress, Treasury Secretary Timothy F. Geithner and Housing and Urban Development Secretary Shaun Donovan suggested reducing the size of loans that can be guaranteed by Fannie Mae and Freddie Mac, from the current ceiling of $729,750 down to $625,500 on October 1.

The administration also wants to reduce the $1.5 trillion investment portfolios of the two companies by 10 percent a year.

Congress established Washington-based Fannie Mae in 1938 and Freddie Mac of McLean, Virginia, in 1970 to increase the capital available for home lending by packaging mortgages into bonds for sale to investors. The companies insured bond buyers against losses, with an implied promise that the U.S. government would make investors whole if the system failed.

An article Saturday by Nick Timiraos at wsj.com said that federal officials "portrayed a housing-finance system that would include a role for both the public and private sectors, but would be different from the current system in that the government's role would be smaller, underwriting standards would be tighter, and borrowers would be required to hold larger amounts of equity in their homes."

"The cost of mortgages is probably going to go up, and homeownership is probably going to go down," said Daniel Mudd, the former chief executive of Fannie Mae who is now CEO of Fortress Investment Group.