It's now or never for reforming the bailed-out government-sponsored enterprises Fannie Mae and Freddie Mac, Federal Reserve governor Jerome Powell warned Thursday.

"We're almost at a now-or-never moment here," Powell said at an event hosted by the conservative American Enterprise Institute, warning the current system is unsustainable because it is too dominated by the government and risky to taxpayers.

"There is a serious risk, if not a likelihood, that this state of affairs may persist indefinitely, leaving our housing finance system in a semi-permanent limbo" if Congress doesn't act, Powell said.

Powell, a member of the central bank, weighed in on the two mortgage giants because their fate is critical for the banks that his agency oversees, he said. He added they're important because housing finance is often at the heart of financial crises, including the 2008 one.

"Memories of the crisis are fading," Powell warned.

Fannie and Freddie have remained in government hands since being bailed out in 2008. Along with other government agencies, they back the vast majority of mortgages. The two enterprises buy home loans from lenders and package them into securities for sale to investors, providing a guarantee in case the mortgages go bad.

Over the past eight years, Congress has failed to reach agreement on the best way to replace Fannie and Freddie, in large part because of disagreements about the role of the government in backing mortgages and subsidizing houses.

In recent weeks, key legislators have been meeting on housing finance reform, and some have expressed optimism about legislation this year or early next year.

Powell declined to endorse specific legislation. Instead, he said, the role of the Fed was to emphasize "the current structure does expose the taxpayer and does carry substantal systemic risk over time."

Also, he offered principles for legislators. If Congress decides to maintain guarantees for mortgage-backed securities, he said, they should be explicit, unlike the implicit backing given to Fannie and Freddie before the crisis. He also said that Congress should seek bipartisan agreement.