The bailout of Fannie Mae and Freddie Mac is likely to cost taxpayers an additional $19 billion and may cost as much as $124 billion more if the economy starts shrinking again, according to a government projection released Thursday.

The rescue of the mortgage giants, which has helped keep the housing market alive amid economic crisis and recession, already has a price tag of $135 billion. The money went to cover losses on defaulted home loans.

The ballooning price of the Fannie and Freddie bailout comes as the Obama administration celebrates news of lower costs on other financial rescues. Administration officials are also preparing to release a plan for reforming the two companies in coming months.

In its projection Thursday, the Federal Housing Finance Agency sought to indicate how much more money the companies may need in the next three years under different economic scenarios.

In the most likely, as defined by the agency, which regulates the two companies, housing prices would decline slightly amid a modest economic recovery, and then inch upward. In this scenario, the total bailout of Fannie and Freddie would cost $19 billion more, or $154 billion.

A more optimistic projection has the housing market springing back to life sooner. In this case, the companies would need just $6 billion more, or $141 billion.

Finally, in a darker scenario, in which housing goes into another tailspin amid a second recession, they would cost $124 billion more, or $259 billion.

Federal Financial Analytics, a Washington research firm, said the FHFA projection gave a good indication of what Fannie and Freddie may ultimately cost taxpayers, but "nowhere near a definitive picture of it."

The firm noted that the analysis was based on housing prices and ignored the potential costs associated with a massive breakdown in the foreclosure process that has recently come to light.

"It's simply impossible to forecast reliably now how much foreclosuregate will cost" Fannie and Freddie, the firm said in a memo to clients Thursday.

Repayment unlikely



In any event, it is becoming increasingly clear that the rescue of Fannie and Freddie will be the most expensive part of the government's response to the financial crisis. While many banks and even American International Group have repaid or are working to reimburse the government, the likelihood of Fannie and Freddie doing so is slim, their regulator said.

The sustained hemorrhaging at Fannie and Freddie comes in sharp contrast to the celebratory tone of the Obama administration recently when discussing the bank rescue known as the Troubled Assets Relief Program.