Fannie Mae posted a net loss of $14.8 billion in the second quarter, following up on a deficit of $23.2 billion from the first three months of the year, it was reported Thursday. Taken together, the two quarters have created a hole so large that the government-sponsored mortgage lender will have to fill it by a third round of rescue funds from the Treasury.

The bleak results were driven by nearly $19 billion of credit-related expenses, reflecting the ongoing impact of adverse conditions in the housing and labor markets.

The losses were partly offset by fair value gains. Net revenue was $5.6 billion in the quarter, up 8% from Q1, with net interest income at $3.7 billion, up 15% from the prior quarter, and guaranty fee income at $1.7 billion, down 5% from Q1. 

After the Q2 results were posted, it was announced Fannie would seek an additional $10.7 billion from the Treasury to cover a net deficit of $10.6 billion. The Federal Housing Finance Agency, which oversees Fannie, has requested that Treasury provide the funds by September 30, 2009.

According to the Washington Post, the Treasury has pumped $85 billion of equity into Fannie Mae and Freddie Mac, the smaller government-sponsored enterprise. (Together, the two GSEs own or guarantee $5.5 trillion in U.S. mortgages). In addition, the Federal Reserve and the Treasury have bought more than $800 billion of their debt.

“Fannie Mae is continuing its efforts to support the housing market by working with lenders, loan servicers and the government to help homeowners avoid foreclosure and provide liquidity to the mortgage market,” the GSE said in a statement. “We have focused our foreclosure-prevention efforts on the implementation of the Making Home Affordable Program, which is designed to significantly expand the number of borrowers who can refinance or modify their mortgages.” 

This is Fannie’s 8th straight quarterly loss. Looking ahead, the company noted “there is significant uncertainty as to our long-term financial sustainability.”

To continue operations, Fannie said it was crucial to continue receiving government assistance.

“We believe that our status as a government-sponsored enterprise and continued federal government support of our business and the financial markets is essential to maintaining our access to debt funding, and changes or perceived changes in the government’s support of us or the markets could lead to an increase in our debt roll-over risk in future periods and have a material adverse effect on our ability to fund our operations.”

There has also been talk of splitting up assets held by the two GSE’s, so that failing assets could be slowly unwound while assets performing well could be the foundation for a newly-created institution. The White House, however, dismissed those rumors on Thursday.