One August 7, the Federal Housing Finance Agency (FHFA) published a report providing the results of the fourth annual stress tests conducted by government-sponsored enterprises Fannie Mae and Freddie Mac (GSEs). In March 2017, the FHFA issued orders directing the GSEs to report the results of the required Dodd-Frank Act stress test to enable financial regulators to determine whether the companies have sufficient capital to support operations in adverse or severely adverse economic conditions. (See previous InfoBytes coverage here.) According to the report, Dodd-Frank Act Stress Tests Results – Severely Adverse Scenario—which provides modeled projections on possible ranges of future financial results and does not define the entirety of possible outcomes—the GSEs will need to draw between $34.8 billion and $99.6 billion in incremental Treasury aid under a “severely adverse” economic crisis, depending on how deferred tax assets are treated. The losses would leave $158.4 billion to $223.2 billion available to the companies under their current funding commitment agreements. Notably, the projected bailout need is lower than what the FHFA reported last year, which ranged between $49.2 billion and $125.8 billion.