At a press briefing on Friday, senior Treasury officials had some good news to trumpet: The government’s bailout of the financial system during the crisis has cost less than expected.


This is largely because the financial system has recovered much faster than expected -- a testament to the success of the government’s stability programs. But the housing system hasn’t. And part of the reason that the pricetag for TARP has dropped is because the bailout’s housing programs have struggled.

Two years after it launched, one TARP program, the Hardest Hit Fund, has only distributed 3 percent of available funds to help homeowners in areas that the housing crisis hit particularly hard. TARP’s other housing programs -- known as HAMP and HARP -- have failed to reach as many homeowners as the administration had originally projected. That’s lowered their cost to taxpayers, but at the expense of helping struggling homeowners.

The same is true with Fannie Mae and Freddie Mac. The agency tasked with overseeing the housing giants has struggled to reconcile two missions: saving taxpayer money and helping to stabilize the economy by swallowing some losses.

The administration, however, has been under increasing pressure to use all available tools to help underwater homeowners -- even if it means that more money is spent upfront on TARP and through Fannie Mae and Freddie Mac. That could change the final price tag for the bailout, but it could also mean a faster, stronger housing recovery.