Last month, Freddie estimated 2008 production at $1.781 trillion.

Conventional loan originations are expected to rise from an estimated $1.490 trillion last year to $1.560 trillion this year and $1.700 trillion in 2010, according to today’s report.

The origination of FHA-insured and VA-guaranteed mortgages is forecasted to climb to $0.440 trillion in 2009 from $$0.294 trillion last year. January’s report had 2008 government fundings at $0.291. But next year’s government fundings are expected to fall to $0.425 trillion.

The 30-year fixed-rate mortgage — which averaged 5.16 percent in Freddie’s Primary Mortgage Market Survey released today — is expected to climb to 5.4 percent in the second quarter from 5.2 percent for the current quarter. By the final quarter of this year, the 30-year is expected to reach 5.6 percent — where it will stay until the second half of next year.

Freddie predicted that the 1-year adjustable-rate mortgage will rise from 4.9 percent in the first quarter of this year to 5.1 percent in the first-quarter 2010. Today’s weekly survey from Freddie indicated that the 1-year ARM averaged 4.94 percent.

First-quarter ARM share is estimated at 3 percent. ARM share is projected to rise 1 percent each quarter until the second-quarter 2010 — when it is expected to be 8 percent. Yesterday, the Mortgage Bankers Association reported weekly ARM share at 2.5 percent.

Refinance share, however is expected to fall from 65 percent during the first-quarter 2009 to 45 percent a year later. Refinance share in MBA’s survey yesterday was 67 percent.