Freddie Mac, the government's second largest mortgage financier, said it earned $3 billion for the three months ended June 30, compared with net income of $577 million in the prior period.

Freddie Mac and its larger sister company Fannie Mae were taken over by the government in 2008 after ballooning mortgage losses at the companies threatened the financial system.

Freddie Mac said loans that originated from 2005 to 2008 — ones with poor credit quality that led to its massive losses — were becoming a smaller portion of its portfolio. At the end of the second quarter, the loans represented 28 percent of its single-family portfolio. The delinquency rate was 3.45 percent at the end of June, compared with 3.51 percent at March 31.

As required under the terms of the government takeover, Freddie Mac must make 10 percent dividend payments on the government loans every quarter — similar to the way credit card borrowers make minimum monthly repayments.

The company said its second-quarter income was sufficient to make a $1.8 billion dividend payment to the U.S. Treasury.

Freddie Mac has drawn $72.3 billion in taxpayer funds since it was taken over. The company has made about $20.1 billion in payments to the Treasury Department and did not require additional government funds in its first quarter of 2011 and three quarters in 2009.

With Freddie Mac and Fannie Mae providing crucial support to the housing market, the Obama administration has been loath to let them fail. Instead, the administration has tried to convince their regulator, the Federal Housing Finance Agency, to allow them to do more to help keep struggling homeowners in their homes, such as reducing loan payments.

But the agency's acting director, Edward DeMarco, has stuck to his belief that allowing the companies to write down loan principal would drive up the cost of the taxpayer bailout. Last week, DeMarco rejected the administration's plea to use taxpayer funds from the bank bailout program to assist homeowners.

Freddie Mac and Fannie Mae buy mortgages from lenders and repackage them as securities for investors, which they then guarantee. The two government-controlled companies along with the Federal Housing Administration provide funds for about 90 percent of all new U.S. mortgages.