Fannie Mae officials announced the company will seek $3.7 billion from taxpayers after reporting a $6.5 billion net loss in its most recent quarter.
The quarterly loss was due to a one-time accounting charge due to the reduction in the corporate tax rate.
Fannie Mae said its 2017 net income was $2.5 billion, compared with 2016's net income of $12.3 billion.
In letters to Fannie and Freddie Mac this month, Watt wrote he didn't consider the tax-cut losses "to relate to any financial instability" in the companies "either now or in the future".More news: Tillerson considers Hezbollah as 'part of political process' in Lebanon
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The government rescued Fannie Mae and Freddie Mac during the housing crisis in 2008 with a combined $187 billion taxpayer bailout.
Fannie Mae has a line of credit with the Treasury Department, and even after taking out $3.7 billion, it would still have $113.9 billion remaining on its credit line. Fannie Mae hasn't taken money from Treasury since 2012, and has made more than $130 billion in dividend payments since 2013, more than repaying its $116 billion bailout. The mortgage giant added that its annual pre-tax income for 2017 was $18.4 billion, compared with $18.3 billion in 2016 which it said reflects "the strength of the company's underlying business fundamentals".
"Fannie Mae expects volatility from quarter to quarter in its financial results due to a number of factors, particularly changes in market conditions that result in fluctuations in the estimated fair value of the financial instruments that it marks to market through its earnings", the company says. With the lower tax rate, deferred tax assets are now worth less, resulting in a wave of accounting losses in corporate America since the law went into effect.
Watt - and the entire mortgage industry - has been pushing Congress to adopt housing finance reform that would release the GSEs from government control, going so far as to call conservatorship "unsustainable".