President Donald Trump posted on Truth Social that he is “giving very serious consideration to bringing Fannie Mae and Freddie Mac public.”

  • This move would end their federal conservatorship that began during the 2008 financial crisis.
  • Fannie and Freddie make up nearly half of the $16 trillion residential mortgage market.

In Context
FHFA Director Bill Pulte reposted Trump’s comments on X and reiterated his longstanding position:

“Fannie and Freddie shouldn’t be in conservatorship forever, but it’s critical to ensure any discussion about exiting conservatorship needs not only to ensure safety and soundness, but how it would affect mortgage rates.”

This isn’t a new idea: President Trump floated privatization during his first term. Director Pulte voiced strong support immediately after his Senate confirmation with a series of posts on his X account.

What Senators are Saying:

Members of the Senate Banking, Housing, and Urban Affairs are proceeding with caution. While Republicans are generally open to ending conservatorship, they want to ensure oversight. Democrats are more skeptical, citing affordability concerns.

  • Sen. Kevin Cramer (R-ND): “I’d want to see the plan, I’d want to talk about transition.”
  • Sen. Mark Warner (D-VA): “You do this the wrong way, you’re going to screw up a housing market that’s already teetering because of lack of supply.”
  • Sen. Mike Rounds (R-SD): Called it a “step in the right direction” but stressed the importance of a careful approach.
  • Sen. Elizabeth Warren (D-MA): Warned “This would be a significant undertaking that raises a number of complex questions for the housing finance system” during Pulte’s confirmation hearing in the Senate.

The bottom line: Any change to the GSEs will have major implications for the housing market writ at large, and ensuring housing affordability must be a key principle in privatization. According to Mark Zandi, Chief Economist at Moody’s, full privatization could raise mortgage costs by 43 to 97 basis points. Borrowers with lower credit scores or incomes would bear the highest increases, potentially making affordable homeownership more elusive.