Freddie Mac: No need for more funding

NEW YORK (CNNMoney) -- Troubled mortgage giant Freddie Mac says that it doesn't need additional funding from the U.S. Treasury, after posting its second profit since its government bailout.

The McLean, Va.-based company said late Wednesday that it posted net income of $676 million in the first quarter, compared to a loss of $6.7 billion a year earlier. The last time Freddie Mac posted a profit was the second quarter of 2009, when it reported income of $768 million.

Federal regulators took over Freddie Mac (FMCC) and sister company Fannie Mae (FNMA) as the firms suffered huge losses due to bad loans during the housing crisis. And it has been propping up the mortgage lenders with funding ever since.

But on Thursday, Freddie Mac said it paid $1.6 billion in quarterly dividends to the U.S. government in the first quarter, and said it didn't need to ask the Treasury for additional aid.

The positive quarter came as delinquent loans and credit losses shrank. Delinquent loans dropped to 3.63%, from 3.84% in the prior quarter, while credit losses declined to $2 billion from $3.1 billion.

CEO Charles E. Haldeman, Jr. said he is encouraged by the latest results, adding that despite its cost cutting this year, Freddie Mac funds one out of every four home loans and helps more than 62,000 borrowers avoid foreclosure.

But at the same time, he isn't declaring a full recovery.

"Our outlook remains cautious," said Haldeman. "Continued improvements on the employment front and in early-stage delinquencies were positive signs during the quarter, but we believe large inventories of unsold homes and a high number of distressed sales will continue to put downward pressure on home prices in many neighborhoods."