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4mo ago

Trump Weighs Privatization of Fannie Mae and Freddie Mac After 16 Years of Federal Control

The president signals a decision is imminent, consulting key officials as economists warn of potential mortgage rate impacts.

A man walks through a plaza at the new Fannie Mae headquarters in Washington, U.S., October 4, 2022. REUTERS/Kevin Lamarque/File Photo/File Photo
Exterior of Federal National Mortgage Association (FNMA) commonly known as Fannie Mae headquarters at 1100 15th St NW on October 9, 2024, in Washington, DC; U.S. President Donald Trump departs the White House on May 22, 2025, in Washington, DC.
U.S. President Donald Trump speaks in the Oval Office at the White House on May 20, 2025, in Washington, DC.

Overview

  • President Donald Trump announced he is seriously considering taking Fannie Mae and Freddie Mac public, ending their federal conservatorship since 2008.
  • Trump stated he will consult Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and FHFA Director William Pulte before making a final decision.
  • Economists caution that privatizing the mortgage giants could lead to higher mortgage rates, potentially exacerbating housing affordability challenges.
  • Fannie Mae and Freddie Mac currently support approximately 70% of U.S. mortgages, playing a critical role in market liquidity and stability.
  • This proposal aligns with longstanding Republican goals to reduce federal involvement in housing finance, though details on implementation remain unclear.